Benefits of Shredding

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 a 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.

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.

Accident reports (settled) shredding after 7 years
Articles of incorporation keep permanently
Bank reconciliations shredding after 3 years
Bank statements shredding after 7 years
Bills of lading shredding after 5 years
Bonds (records of issuance) keep permanently
Budgets Shredding after 3 years
Capital Stock:  
Applications for authorization and issuance keep permanently
Certificates (canceled) keep permanently
Ledger keep permanently
Transfer records keep permanently
Sales slips (cash and charge) shredding after 7 years
Check register shredding after 10 years
Commission reports shredding after 6 years
Corporate shredding after 20 years
Employee shredding after 7 years
Vendor shredding after 7 years
Accounting shredding after 5 years
Credit and collection shredding after 7 years
General shredding after 3 years
Personnel shredding after 7 years
Cost accounting records shredding after 5 years
Deeds keep permanently
Delivery receipts shredding after 5 years
Dividend register keep permanently
Depreciation schedules shredding after 7 years
Equipment leases (after expiration) shredding after 6 years
Equipment repair records shredding after 3 years
Expense reports:  
Departmental shredding after 5 years
Employee shredding after 5 years
Fidelity bonds shredding after 3 years
Financial reports:  
Audited keep permanently
Annual keep permanently
Interim shredding after 3 years
Fire damage reports shredding after 6 years
Franchise agreements keep permanently
Freight draft, bills and claims shredding after 5 years
Garnishments shredding after 3 years
Insurance policies keep permanently
Inventory records shredding after 7 years
Invoices (issued or received) shredding after 7 years
Invoices - fixed assets shredding after 7 years
Labor records:  
Applications (employees) shredding after 7 years
Contracts shredding after 7 years
Daily time reports shredding after 5 years
Disability claims shredding after 7 years
Earnings records shredding after 7 years
Employee service records shredding after 7 years
Pay checks shredding after 7 years
Personnel files shredding after 7 years
Salary and wage rate changes shredding after 7 years
Salary receipts shredding after 7 years
Time cards, tickets and clock records shredding after 7 years
Unemployment claims shredding after 7 years
Withholding exemption certificates shredding after 7 years
Workers' compensation reports shredding after 10 years
Leases shredding after 7 years
Ledgers and journals:  
Accounts payable ledger shredding after 7 years
Accounts receivable ledger shredding after 7 years
Cash journal shredding after 10 years
Customer ledger shredding after 7 years
General journal shredding after 10 years
General ledger keep permanently
Journal entries shredding after 1 year
Payroll journal shredding after 10 years
Plant ledger keep permanently
Purchases journal shredding after 10 years
Royalty journal shredding after 10 years
Sales journal shredding after 10 years
Stock ledger keep permanently
Licenses shredding after 1 year
Maintenance and repair records:  
Buildings shredding after 7 years
Machinery shredding after 5 years
Manufactured stock records shredding after 7 years
Minute books keep permanently
Mortgages shredding after 7 years
Notes (canceled) shredding after 7 years
Note register keep permanently
Options shredding after 7 years
Patent records keep permanently
Pension records keep permanently
Petty cash records shredding after 3 years
Plant acquisition records keep permanently
Property records:  
Account ledgers keep permanently
Appraisals keep permanently
Damage reports shredding after 7 years
Deeds and titles keep permanently
Depreciation shredding after 7 years
Plans and specifications keep permanently
Purchases keep permanently
Sales keep permanently
Taxes shredding after 10 years
Purchase order copies shredding after 3 years
Purchase invoices shredding after 7 years
Receiving reports shredding after 3 years
Remittance statements shredding after 3 years
Requisitions shredding after 3 years
Sales invoices shredding after 3 years
Salesmen commission reports shredding after 7 years
Securities (brokerage slips) shredding after 7 years
Shipping tickets shredding after 5 years
Stockholder records (list of minutes, proxies, reports to stockholders) keep permanently
Surety bonds shredding after 3 years
Tax records (including worksheets, bills and statements, and agent's reports) shredding after 10 years
Tax returns (copies):  
Estate keep permanently
Gift keep permanently
Income keep permanently
Payroll shredding after 7 years
Personal property shredding after 10 years
Sales and Use shredding after 10 years
Social security shredding after 7 years
Title papers keep permanently
Trademark records keep permanently
Travel records (employees) shredding after 3 years
Uncollectible accounts records shredding after 7 years
Union (labor) contracts keep permanently
Vouchers (copies) shredding after 7 years
Vouchers (register) shredding after 10 years
Wage and rate records shredding after 7 years
Warrants keep permanently
Withholding and exemption certificates shredding after 7 years
W-2 forms shredding after 7 years

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.