There’s a natural energy that comes from starting a new year: a desire for clarity, efficiency and goal-setting. Might we suggest applying that energy to reviewing and organizing your financial and operational records?
From an accountant’s perspective, good recordkeeping isn’t just about filing papers, it’s about making sure your business is prepared, compliant, and positioned to take advantage of opportunities ahead. Just imagine if you could reduce the time you spend searching for needed documents, free up space (both physically and digitally!), and gain peace of mind knowing you are ready for whatever comes next, whether it be preparing for tax season, planning a sale, or any other sort of business decision.
Here you’ll find our recommendation for just how long you should keep specific record categories so that you can organize yourself and your business with confidence. As you review the below guidance, think about whether you can “go digital” with some of your physical paperwork, which not only helps you regain space but offers you better security and an easier way to track and search. And there’s no better time than the start of the year to determine a consistent approach and stick to it.
Keep for 1 Year:
- Bank reconciliations
- Correspondence with customers or vendors
- Duplicate deposit slips
- Receiving sheets
- Requisitions
Keep for 3 Years:
- General correspondence
- Bank statements & deposit slips
- Employment applications
- Expired insurance policies
- Internal reports, including internal audit reports
- Monthly trial balances
- Petty cash vouchers
- Physical inventory tags
- Purchase orders
Keep for 7 Years:
- Accident reports and claims for settled cases
- Accounts payable ledgers and schedules
- Accounts receivable ledgers and schedules
- Canceled checks (general, payroll, payroll taxes)
- Employee personnel records (after termination)
- Expired contracts and leases
- Expense analysis and expense distribution schedules
- Inventories of products, materials and supplies
- Invoices to customers or from vendors
- Notes receivable ledgers and schedules
- Expired option records
- Payroll records and summaries, including payment to pensioners
- Plant cost ledgers
- Purchasing department copies of purchase orders
- Sales records, safety records
- Canceled stock and bond certificates
- Subsidiary ledgers
- Tax returns, worksheets, revenue agents’ reports and other related documents
- Time books
- Voucher register and schedules
- Voucher for payments to vendors, employees, etc.
Keep Permanently:
- Articles of incorporation, bylaws, partnership agreements
- Audit reports of accountants
- Cash books, charts of accounts
- Canceled checks (fixed assets or income taxes)
- Capital stock and bond records
- Contracts and leases still in effect
- Correspondence, legal and tax related
- Mortgages, bills of sale, deeds
- Depreciation schedules
- Financial statements (end of year)
- General, private ledgers & end-of-year trial balances
- Insurance records, current accident reports, claims, policies
- Sales, cash receipts and disbursements journals, etc.
- Minute books of directors and stockholders
- Retirement plan records
- Patents, copyrights, and trademark registration
- Property appraisals by outside appraisers
- Property records
If you’re unsure about how long to retain certain records or need assistance cleaning up your books, our Outsourced Accounting team is here to help! Please contact us to discuss your personal situation.