Too often I hear one of two, equally bad answers:. In my role here at AIIM as the Director of Professional Development, I get this question all the time from my students, session attendees, and sometimes even my colleagues. I remember I once had a discussion with a colleague, now some 20 years ago, about getting rid of records, the right ways to do it, etc. The colleague was aghast and demanded to know how I could ethically support the destruction of evidence like that?! After some discussion, I think I brought the person around to the point that destroying records is not destroying evidence — as long as you follow your records program consistently.
There are some records that do need to be kept for seven years, of course. And there may some that need to be kept permanently, especially if they have historical value. The latter, in particular, is especially true for federal governments and their component agencies. But these are generally a fairly small volume compared to all of their records that are not permanent. So, how long should you keep that record for? The right answer, of course, is it depends — and it depends on a LOT of different variables, but we will define some of the characteristics that will help you find an answer to the question.
If the organization decides to keep records longer than the minimum retention period, there is an additional step to take. The length of retention with the new retention period should be documented in the retention schedule as the baseline moving forward. That is, the organization should make a formal decision, and document that decision, rather than leaving it to individual business leaders' whims. The good news is that providing the answer s to this question is one of the foundational parts of an effective records management program.
A solid records management program will have in place processes for:. So, to answer the question posed in the title, "It depends" is the most correct, followed closely by "so go ask the records managers, they'll know. Accounting Services Records should be retained for a minimum of seven years. Accountants, being a conservative bunch, will often recommend that you keep financial statements , check registers, profit and loss statements, budgets, general ledgers, cash books and audit reports permanently.
Operational Records, including bank account statements, credit card statements, canceled checks, cash receipts and check book stubs, follow the seven year rule. Subscribe to Email Updates. We do not provide tax services, including but not limited to tax preparation, tax law, tax compliance, tax filing, and tax planning services.
Please consult your CPA and tax advisors for tax consulting. Privacy Policy. Contact Info. Address Subscribe to our blog. Hold up. Before you toss them, double check to see whether anyone else you do business with might need them.
Creditors, business lawyers, and insurance companies all sometimes require you to keep records longer than the IRS does. This is really just another benefit to keeping digital records. Instead of worrying whether you should be keeping or getting rid of them, you can archive them permanently. Or even better, digitize it. We're an online bookkeeping service powered by real humans.
Bench gives you a dedicated bookkeeper supported by a team of knowledgeable small business experts. Your bookkeeping team imports bank statements, categorizes transactions, and prepares financial statements every month. Get started with a free month of bookkeeping. This post is to be used for informational purposes only and does not constitute legal, business, or tax advice.
Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.
Sign up for a trial of Bench. No pressure, no credit card required. For Partners. By Nick Zarzycki on October 20, How long do you need to keep tax records for?
Exceptions to the three-year rule Do I need to hang on to paper bank statements?
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