Assessing administrative value is crucial for businesses to determine which records to keep or destroy. This categorization guides document retention policies and can have legal implications. All records must be evaluated for their value, even in smaller companies, to avoid negative consequences. Administrative value also plays a role in public oversight and historical purposes.
Administrative value is the assessment of the importance of a business record to daily operations. Records considered to be of administrative value are kept on file or used regularly in the conduct of business. This categorization of business records guides a company’s document retention policy and can have legal implications in a variety of circumstances, such as in response to a discovery request during litigation or pursuant to a tax audit.
Business records are the lifeblood of operations. The paper transaction trail is how a company fulfills its government obligations to prove compliance with the law. Businesses are required to document sales to prove income tax payments, as well as employee status records to prove work eligibility and prove hours worked. Policies and procedures are usually committed to paper, which creates a historical record of policy change over time.
These requirements, along with internal needs and industry standards, mean that all records a company produces must be evaluated for their administrative value. A company determines if the record is something that must or should be kept for a certain period of time or if it can be destroyed without consequences. Larger companies typically establish a document retention policy that helps employees determine the value of documents so that the types of business records retained are consistent throughout the company.
Smaller companies rarely design a formal document retention policy, but determining administrative value is no less important in a small business environment. Improper record keeping can hurt any business. For example, a company that contracts for services will typically provide the customer with the right to audit their account activity records. If proper administrative records are not maintained, the customer may be able to process a return of payments made. In a retail sales environment, successfully defending against a slip and fall lawsuit may depend on the written policies and procedures that employees received as part of their initial training.
Administrative value also plays a role in a public context for oversight and historical purposes. The public typically has an interest in the day-to-day operations of government officials and offices, and some countries have laws that authorize the public to access government records, such as the US Freedom of Information Act. An administrative value assessment usually determines what records must be kept and what can be shredded during law enforcement. Without this emphasis on the value of certain business documents, much of the transactional history of businesses, agencies, and organizations would be lost.
Asset Smart.
Protect your devices with Threat Protection by NordVPN
