Just How Long Should You Be Holding On To Business Records?
The responsible and savvy business owners out there know the importance of keeping business records. You never know when you may be hit with an audit, when the legal need will arise to prove your paper trail, or when a financial institution may need to see proof of your business operations.
So, where do you draw the line? Which types of business records are important to hang onto? And how long should you keep your business records on file before it’s safe to clean out?
Often, it’s best to keep some general rules in mind when it comes to your paperwork. The safe assumption, as outlined by the Internal Revenue Service (IRS), is seven years.
To keep it simple, this business record rule of seven years is also commonly accepted for documents other than tax records. When it comes to other business records at your company, such as employment records, asset records, canceled checks, credit card statements, and more, seven years is a good amount of time. The truth is that many lawyers and accountants might even consider seven years more than enough time for some of the less critical business records.
What kind of business records?
Again, the exact legal requirements will vary based on the type of document and the reason you hang onto it, but none of the following documents are going to be necessary for you to keep on file after seven years:
- Bank account statements
- Credit card statements
- Canceled checks
- Business ledgers
- Business asset records
- HR files
- Employment records
- Business and personal income tax returns
- Expired contracts
- Accident reports and claims
As you can see, the list goes on. And again, it’s important to note that the seven-year guideline is just that: a guideline. If you want to be 100% sure that you can remove a business record, but you aren’t sure, it’s best to contact the experts and professionals you retain.
For taxes and accounting documentation, you can contact the experts at Tobin & Collins today to discuss your business records and all of your accounting needs!