I do not know, how it is at your company, but at ours, the summer time is not only a time to rest and draw a breath after more than half a year of a marathon related to financial statements, tax return and audits, but also the time for cleaning, which includes archiving documents. During all activities related to the operation of a company, a vast amount of invoices, documents, contracts and other data emerges. When I think about all of these data, I ask myself, if it is even possible to determine the percentage of electronic or “paper” data and which of the forms prevails in companies today. Either way, though, both forms of data need to be retained and archived, we must observe the periods and rules laid down by the laws.

Some companies arrange the archiving of documents themselves. Often, one room is reserved for this, and all files, boxes and other containers with documents are stored there, until the room is full and the situation needs to be resolved. It is not always observed, though, that even such a reserved room needs to fulfil certain criteria. Other companies do not wish to bother with archiving and retaining documents and they entrust their documents to the hands of professional companies, which look after all that it necessary.

Let us take a look at the basic information together, which needs to be taken into account when archiving corporate data.

Why do we actually have to archive?

Several legal norms oblige us to archive documents. As it happens, in order for it not to be so easy in our legal jungle, we need to search various laws and look for the necessary sections. Only as a small example, these include for example act no. 499/2004, on archiving and records management, decree no. 645/2004, which implements some stipulations of the act on archiving and records management, act no. 563/1991 Sb., on accounting, act no. 582/1991 Sb., on organisation and realisation of social security, act no. 235/2004, on the value added tax, act no. 586/1992 Sb., on income taxes, act no. 21/1992 Sb., on banks, and others.

From the perspective of legal norms, archiving fulfils a clear purpose – substantiation. In case of an audit by the financial authority, companies need to have the documents available, so that it would be possible to prove, how a specific document was processed and reflected in taxes, either in the value added tax return or the income tax return. In the case of wage documents, the reason is mainly the substantiation of claim to pension insurance benefits.

What are the archiving periods?

The question of archiving periods is not a simple one. First, it is governed by various laws, and it also differs according to the document they apply to. In a very simplified way, it could be said that the archiving periods for tax and accounting documents are usually 10 years, and the deadlines for wage documents have and archiving period ranging from 3 to 30 years.

If there is a legal proceeding or a similar proceeding underway, though, the periods are prolonged.

How to store documents?

First of all, documents should be arranged duly, because we archive them for the purpose of substantiation, that is retrieving the necessary data. Looking for a document in bags or piled unlabelled boxes will be like looking for a needle in a haystack. The place, where we store documents, should also have stable temperature and light, so the data are not damaged. A damp cellar with mice running around will probably not be an ideal place. Last but not least, we should keep data security in mind. Not only in connection with the current General Data Protection Regulation (GDPR) of the European Union.

If you entrust the archiving of documents to an external company, you should consider, if it is a reliable company, what premises it uses for archiving and if your data are safe. We will surely all remember some case, when various sensitive data ended up in a common dustbin or on some garbage dump outside town. The archiving company should provide not only storage of the data, but should help you in case you need to retrieve some information, and of course also with ensuring the discarding of data.

How does discarding take place?

After the given periods expire and a document no longer needs to be retained, it is possible to discard it. By discarding we understand irrecoverable destruction of data, so that no one could read them anymore. For this purpose, it is possible to use the services of incinerating plants or various shredders are used, which perform data discarding reliably. From the perspective of GDPR, it is also necessary to keep records of how discarding of data took place.

What if the company is terminating its activities?

In this case, too, the company needs to ensure the retaining of selected documents for prescribed periods of time. Companies entering into dissolution must even negotiate with the State District Archive prior to their deletion from the trade register. The Archive may decide, among other things, that certain data need to be archived longer or that they need to be stored directly at the State District Archive, for example due to their historical significance.

How about electronic data?

For electronic data, or as the accounting act correctly calls them, the technical data, the same rules apply as for data in paper form. The difficulty here usually is, if these data fulfil the requirements of the individual laws, and if they can be considered conclusive. But we will discuss this in some other article.

Conclusion

If you are not certain about how to archive data yourselves, please, do not hesitate to turn to us. You can also visit a tutorial on this subject, which is being prepared and will take place

at the premises of our company in October 2018. I wish you peaceful and tranquil summer days.