In dealing with clients that own their own businesses, the question often comes up on what records to keep and what can be tossed. All businesses, whether they are service, manufacturing or sales, have to fight the mountain of records that must be maintained to understand and grow that business.
Even with the electronic process of scanning, some amount of grooming of records needs to occur so that important records are neither lost nor take forever to find. A lot of experts have expounded on the various categories of what to keep and what to toss. The following is a general offering of what should and should not be kept. Every business operator, regardless of what type of widget they make, should evaluate their individual circumstance, however. If there is a specific question, be sure to contact your CPA, financial advisor or business attorney.
Good luck,
Randy Fisher
Business correspondence 3 years
Employee personnel records (after the employee has been terminated) 3 years
Employment applications 3 years
Insurance policies (for policies that have expired) 3 years
Settled accident claims 7 years
Cancelled checks for standard transactions 7 years
Invoices from vendors 7 years
Time books 7 years
Bank statements and reconciliations 9 years
Audit reports of CPAs Permanent
Cancelled checks for key payments (taxes, purchases of
property, special contracts) Permanent
Contracts and leases in effect Permanent
Corporate minute books for directors and stockholders Permanent
Capital stock and bond records Permanent
Deeds, mortgages and bills of sale Permanent
General and private ledgers Permanent
Property records Permanent
Tax returns, worksheets and related documents Permanent
Trademark registrations Permanent
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