You know you need to be saving your business records, but do you know how long it’s necessary to keep them? In the modern paper-free era, why do you even need to keep a backlog of old documents? At CSI Account Solutions in Colorado Springs, CO, you can work with a certified accountant to make sure you don’t throw original documents out too early, but also don’t keep them longer than necessary.
You can usually toss old tax forms earlier than most other records. Since all of that information is kept by the IRS already, it’s less important to keep them for extended periods of time. However, you should still hang on to tax returns and any supporting records until the audit window closes—which is between three to six years, depending on multiple factors. If you’re not sure how long to keep these files, opt for at least six years to be safe.
General Business & Operations Records
This category includes several different documents, including all records related to operations—money incoming and outgoing—as well as accounting records and ownership records. You’ll get different time frames for each of these, depending on whether or not the accountant you consult provides more conservative estimates. For example, one accountant might tell you to keep accounting services records like financial statements, budgets, and cash books indefinitely, while another will say you can toss them after seven years.
Ownership records, including property deeds, stock ledgers, and annual meeting minutes, on the other hand, have to be kept permanently. However, bank and credit card statements, cash receipts, and canceled checks only need to be held for seven years.
Employee & Applicant Records
All employee files should be kept for at least seven years from the date they leave, retire, or are fired. If they filed a claim against the business or claimed a work-related injury, keep those records for a total of 10 years.
You also need to keep job applicant information on file, even for those you didn’t end up hiring, for at least three years. This will protect you if a hiring discrimination claim is filed against you.
If you want to get a handle on that mounting pile of documents, call CSI Account Solutions in Colorado Springs at (719) 344-5837 or visit their website to speak with an accountant. They can help you get organized and make sure you have all your documents filed and easily searchable. You can also outsource your other accounting services like bookkeeping, payroll services, and budget and forecasting analysis.