RETAINING BUSINESS RECORDS

How Long Should Business Records Be Kept?

A common and ongoing question facing business clients today is how long business records should be retained. There is no easy answer to this question. Many factors come into play: type of business, the specific needs of management, and state and regulatory requirements, just to name a few.

The following are only suggested guidelines for retaining business records. Since record retention requirements vary for Federal purposes, from state to state, and have been the subject of increasing regulatory activity, legal counsel should be consulted in specific instances.

Retain Permanently:

Accountants’ audit reports

Bills of sale for important purchases

Canceled check (for important payments)

Capital stock and bond records and other records dealing with the firm’s capital structure

Cashbooks

Charts of accounts

Contracts and leases (major and/or current)

Correspondence (legal and important matters)

Credit history

Deeds and mortgages

Financial statements (year-end)

General and private ledgers

Insurance records

Journals

Minute books, bylaws and certificate of incorporation

Property appraisals

Property records

Tax returns (along with all related documents and worksheets)

Trademark registrations

Retain for 7 Years:

Accident reports and claims (settled cases)

Accounts payable and receivable ledgers and schedules

Canceled checks (for unimportant payments)

Canceled stock and bond certificates

Contracts and leases (expired)

Expense analyses and distribution schedules

Expired option records

Inventories (of products, materials aim supplies)

Invoices (customer and vendor)

Notes receivable ledgers and schedules

Payroll records and related documents (including pensioners’ payments)

Plant cost ledgers

Purchasing department copy of purchase orders

Royalty computations

Sales records

Scrap and salvage records

Subsidiary ledgers

Time books

Vouchers for payments to vendors, employees and related parties

Retain for 5 Years:

Excise tax computations

Internal audit reports

Retain for 3 Years:

Correspondence (general)

Employee savings bond registration records

Employment applications

Insurance policies (expired)

Miscellaneous internal reports

Petty cash vouchers

Physical inventory tags

Retain for 2 Years:

Proxies of voting security holders

Retain for 1 Year:

Bank reconciliations

Duplicate bank deposit tickets

Purchasing orders (not purchasing department copy)

Receiving sheets

Requisitions

Stenographers’ notebooks

Stockroom withdrawal forms