Benefits of Shredding

Information That Requires Destruction Can Be Found At Every Place of Business

It’s sad but true; we live in a world where lives can be ruined and businesses destroyed by documents that are improperly discarded. Identity theft is the fastest growing crime in the United States, and Houston ranks at the top of the list for Texas. You may have seen local news stories where a company disposed of documents containing personal information and now finds themselves trying to explain how it happened on the six o’clock news. Some say any publicity is good publicity, but rest assured, if your company finds itself in front of millions of Houstonians for not protecting their personal information, not only will you suffer loss of business, but you may lose your business entirely.

The Texas Attorney General is extremely serious and very committed to protecting Texans from Identity theft. In 2007, the Texas Attorney General’s office fined businesses over two million dollars for not adhering to the State’s laws for the disposal of customer records that contain personal and private information. The Texas Business and Commerce Code clearly defines what records need to be destroyed, and it also clearly defines the penalties for not doing so. The Texas Attorney General’s office has teams of dumpster divers that travel the State looking for companies that are in violation. In most cases, the documents are discovered by local police officers on patrol or by a concerned citizen that stumbles across them. There are not only State laws for the destruction of documents, but depending on your industry, there are National Laws as well. We strongly recommend that companies who do not have a risk management officer, appoint an individual to oversee the company’s document destruction and retention policy. It’s important to note that a crime does not have to occur. The mere fact that the documents were exposed to the risk of identity theft is enough for the Texas Attorney General to prosecute. It only takes one incident to destroy years of hard work and ruin a company’s reputation, as well as its standing within the community.

A Retention Schedule Should be in Place Governing the Length of Time Records Should be Kept

Did you know that every Texas business is required to develop retention and disposal procedures? Under provisions of Chapter 35 of the Business and Commerce Code, businesses are required to develop document retention and document disposal procedures to protect their client’s personal and private information. The reason for these laws is very clear, they are to protect millions of Texans from falling victim to identity theft.

The period of time that business records are stored should be determined by a retention schedule that takes into consideration operational value, legal value, fiscal value and historical value. No document should be kept longer than this retention period. By not adhering to a program of routinely destroying stored records, a company exhibits suspicious disposal practices that could be negatively construed in the event of litigation or audit. Keeping documents past their necessary life cycle leaves them vulnerable to theft, discovery, and increased storage costs. It is stated in the Federal Rule Twenty-Six that in a lawsuit, both parties must provide all relevant information to the counsel of the opposition within 85 days of the defendant's initial response. Not fulfilling this requirement may cause further findings against them. If a business has a set schedule for document destruction, it will make things much easier if the need arises to search through all documents for specifically dated information. It is highly recommended to record the dates on which data is destroyed as a safeguard.

On-Site Shred offers the following guidelines but emphasizes that after you develop your policy, it should be reviewed and signed off by your Certified Public Accountant and your company Attorney.

TYPE OF DOCUMENTLENGTH OF TIME BEFORE SHREDDING
Accident reports (settled)shredding after 7 years
Articles of incorporationkeep permanently
Bank reconciliationsshredding after 3 years
Bank statementsshredding after 7 years
Bills of ladingshredding after 5 years
Bonds (records of issuance)keep permanently
BudgetsShredding after 3 years
Capital Stock:
Applications for authorization and issuancekeep permanently
Certificates (canceled)keep permanently
Ledgerkeep permanently
Transfer recordskeep permanently
Sales slips (cash and charge)shredding after 7 years
Check registershredding after 10 years
Commission reportsshredding after 6 years
Contracts:
Corporateshredding after 20 years
Employeeshredding after 7 years
Vendorshredding after 7 years
Correspondence:
Accountingshredding after 5 years
Credit and collectionshredding after 7 years
Generalshredding after 3 years
Personnelshredding after 7 years
Cost accounting recordsshredding after 5 years
Deedskeep permanently
Delivery receiptsshredding after 5 years
Dividend registerkeep permanently
Depreciation schedulesshredding after 7 years
Equipment leases (after expiration)shredding after 6 years
Equipment repair recordsshredding after 3 years
Expense reports:
Departmentalshredding after 5 years
Employeeshredding after 5 years
Fidelity bondsshredding after 3 years
Financial reports:
Auditedkeep permanently
Annualkeep permanently
Interimshredding after 3 years
Fire damage reportsshredding after 6 years
Franchise agreementskeep permanently
Freight draft, bills and claimsshredding after 5 years
Garnishmentsshredding after 3 years
Insurance policieskeep permanently
Inventory recordsshredding after 7 years
Invoices (issued or received)shredding after 7 years
Invoices - fixed assetsshredding after 7 years
Labor records:
Applications (employees)shredding after 7 years
Contractsshredding after 7 years
Daily time reportsshredding after 5 years
Disability claimsshredding after 7 years
Earnings recordsshredding after 7 years
Employee service recordsshredding after 7 years
Pay checksshredding after 7 years
Personnel filesshredding after 7 years
Salary and wage rate changesshredding after 7 years
Salary receiptsshredding after 7 years
Time cards, tickets and clock recordsshredding after 7 years
Unemployment claimsshredding after 7 years
Withholding exemption certificatesshredding after 7 years
Workers' compensation reportsshredding after 10 years
Leasesshredding after 7 years
Ledgers and journals:
Accounts payable ledgershredding after 7 years
Accounts receivable ledgershredding after 7 years
Cash journalshredding after 10 years
Customer ledgershredding after 7 years
General journalshredding after 10 years
General ledgerkeep permanently
Journal entriesshredding after 1 year
Payroll journalshredding after 10 years
Plant ledgerkeep permanently
Purchases journalshredding after 10 years
Royalty journalshredding after 10 years
Sales journalshredding after 10 years
Stock ledgerkeep permanently
Licensesshredding after 1 year
Maintenance and repair records:
Buildingsshredding after 7 years
Machineryshredding after 5 years
Manufactured stock recordsshredding after 7 years
Minute bookskeep permanently
Mortgagesshredding after 7 years
Notes (canceled)shredding after 7 years
Note registerkeep permanently
Optionsshredding after 7 years
Patent recordskeep permanently
Pension recordskeep permanently
Petty cash recordsshredding after 3 years
Plant acquisition recordskeep permanently
Property records:
Account ledgerskeep permanently
Appraisalskeep permanently
Damage reportsshredding after 7 years
Deeds and titleskeep permanently
Depreciationshredding after 7 years
Plans and specificationskeep permanently
Purchaseskeep permanently
Saleskeep permanently
Taxesshredding after 10 years
Purchase order copiesshredding after 3 years
Purchase invoicesshredding after 7 years
Receiving reportsshredding after 3 years
Remittance statementsshredding after 3 years
Requisitionsshredding after 3 years
Sales invoicesshredding after 3 years
Salesmen commission reportsshredding after 7 years
Securities (brokerage slips)shredding after 7 years
Shipping ticketsshredding after 5 years
Stockholder records (list of minutes, proxies, reports to stockholders)keep permanently
Surety bondsshredding after 3 years
Tax records (including worksheets, bills and statements, and agent's reports)shredding after 10 years
Tax returns (copies):
Estatekeep permanently
Giftkeep permanently
Incomekeep permanently
Payrollshredding after 7 years
Personal propertyshredding after 10 years
Sales and Useshredding after 10 years
Social securityshredding after 7 years
Title paperskeep permanently
Trademark recordskeep permanently
Travel records (employees)shredding after 3 years
Uncollectible accounts recordsshredding after 7 years
Union (labor) contractskeep permanently
Vouchers (copies)shredding after 7 years
Vouchers (register)shredding after 10 years
Wage and rate recordsshredding after 7 years
Warrantskeep permanently
Withholding and exemption certificatesshredding after 7 years
W-2 formsshredding after 7 years

PAPER SHREDDING SAVES MONEY:

Outsourcing your document shredding will save you money. Many businesses wonder if they can afford to outsource their document shredding. The real question is “Can you afford not to?” If you take the time to answer the following questions, you will be surprised at how much in-house paper shredding actually costs.

Equipment Costs:

  • 1. Average costs of shredding machine(s) ______________
  • 2. Number of shredding machines in office ______________
  • 3. Times shredding machines are replaced during year ______________
  • Total cost of paper shredding machines ((1 X 2) x 3) ______________

Employee Costs

  • 1. Total number of employees ______________
  • 2. Minutes a day an employee spends sorting ______________
  • 3. Minutes spent hovering over the shredding machine ______________
  • 4. Minutes per day clearing paper jams ______________
  • 5. Minutes per day disposing and cleaning up paper ______________
  • ( 1 X (2+3+4+5))/60 = Employee time ______________
  • 6. Average employee salary (include taxes & benefits) ______________
  • (Employee time X Avg Employee salary) x 265 (working days) ______________
  • Waste disposal services cost ______________
  • Texas AG fines for improper disposal ______________
  • Total costs for in-house paper shredding ______________

Compare your final calculation with our pricing section and you will be very surprised at the amount of money you will save by outsourcing your paper shredding! You may ask yourself why we charge so little for our services? The answer is simple; we are very efficient in what we do. Our document shredding trucks are able to process 5000 pounds of paper an hour, which means we are able to serve more customers in a given day and we pass that efficiency savings on to you!

In Summary, outsourcing your paper shredding needs will benefit you by;

  • Saving employee time from document shredding
  • Saving employee cost from paper shredding
  • Saving equipment expense from document shredding
  • Saving equipment maintenance costs from paper shredding
  • Saving from waste disposal fees
  • Reduces your risk from improperly discarded documents
  • Reduces your risk of discovery
  • Reduces your document storage costs
  • Become an active business in protecting the environment.