What are the Best Tips for Business Records Retention?

Florence J. Tipton

Companies large and small are often faced with the challenge of maintaining an organized business records retention system. Generally, business documents are kept up to the stipulated local or regional time limitations. Knowing the requirements for what to keep and for how long is considered crucial for having an adequate records system.

Records retention requirement differ by the type of business involved.
Records retention requirement differ by the type of business involved.

The size of the business usually determines the depth of a business records retention system. Some of the business documents that are kept include tax filings and personnel files. Financial records generally maintained by a business are operational expenses, capital purchases, sales receipts and property assets.

Financial records are usually kept for seven years.
Financial records are usually kept for seven years.

A business should verify the business records retention requirements that apply in the jurisdiction that regulates the business’s industry. Requirements in the United States for tax-related business records retention is that business documents be kept for at least three years. Some revenue requirements may necessitate keeping financial records even after the recommended time has expired.

Personnel records are usually retained for at least four years. These and other records are kept in a secure place, especially those that contain private information about past and current employees. Complete records of when payroll taxes were filed and paid are typically maintained.

In most cases, financial records are kept for a minimum of seven years. Statements from financial institutions, inventory lists and annual income statements are some of the types of documents that could be included. Keeping good financial records could minimize a business’ exposure for legal matters.

Businesses may also find that having a purging system for getting rid of old or irrelevant business documents is beneficial. A policy for a business records retention system might help to streamline the process and ensure all employees are following the same practices. This is generally an ongoing part of the process for maintaining adequate business records.

It is usually a good idea to have adequate storage space if business documents are kept on-site. It is also a general practice to keep an electronic file of business records. That way, pertinent documents are still accessible and the business can avoid a shutdown in case a fire or other disaster destroys paper business documents.

Most businesses might choose to use a records storage management company. This has the potential of freeing the organization’s time to focus on business related issues, rather than the management of business records retention. Any possible concerns with outsourcing the business records retention system might be reduced. A reputable company will generally outline its security features and practices for maintaining business documents.

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