These records can help you defend against claims or suits for compensation that occur long after your business closes. If you’re using a platform like EverSign for your hiring and onboarding documents, then maintaining these records is easier. Electronic record-keeping helps make everything more organized in the HR department.

• You may need them to prepare future tax returns or for other purposes.
• Get your organizational documents digital with the best document scanning services available in the market.
• Also, adding the date at the end of the filename can help you distinguish the same type of document from different time periods.
• She also says you may want to invest in a safe deposit box for papers that can’t be easily replaced.
• It’s crucial to hang onto records that reflect your income and deductions in case your business is audited, and also to protect yourself and your business against any legal or insurance issues.
• When you’re running a small business, you have myriad things to worry about on a daily basis, so keeping detailed records may be the last thing on your mind.

These are the most important that you may need at any time in the future for a variety of reasons. Ensuring that they’re kept in a safe place and that a copy is secure will save you a lot of time when they’re needed. There are also a number of apps available that can help you quickly record and store a variety of documents. Many can be managed through your smartphone or tablet, so you can get rid of paperwork (especially receipts) when you’re nowhere near your home computer. One key to creating a workable home filing system is to start cutting down on the amount of paper you receive. It can really reduce the amount of paper you’ll have to shred or file.

Maximising ROI: How Dox And Box Transform Long-Term Document Storage Into An Investment

It seems like a lot to handle, but there are ways of making record maintenance easier. Otherwise, you’ll need to shred these up along with any other business documents you no longer need to retain. There are literally thousands of documents HR departments have to mine through, which can make document retention difficult.

• Piles of paper are a pain, and managing a home filing system can be a drag.
• Businesses organized as corporations should keep some additional documents.
• It’s always best to consult with your accountant during a business transition.
• Except in a few cases, the law does not require any special kind of records.
• When this happens, you have to keep track of all your business asset records.

Otherwise, you can dispose of them as soon as you verify your payment was processed. You can also dispose of bank withdrawal and deposit slips after verifying them with your monthly statement. For property and investments, hang onto important paperwork and documentation as long as you own the asset. Before you throw away that old receipt, here’s how long to keep financial records for your business.

How long to keep documents before shredding

You might want to permanently keep records for employees who receive pension or retirement plan benefits from your company plan to protect yourself if the employee files a claim many years after retirement. Some states, including Texas, Illinois and North Dakota, have adopted this standard. It says businesses should keep records not covered under statute-specific retention periods for at least three years.

It’s critical to know both federal and state periods of limitation for audits and their requirements for document retention. An accountant can explain how your business can meet these requirements and the penalties you may face for failing to do so. Like how long to keep business documents, such as canceled checks, tax how long do you legally have to keep business documents documents (and supporting data), HR documents, and more. Your business records can also come in handy in many other instances. Insurance claims can be filed years after an incident, so maintaining those records can offer protection. Likewise, these records can help support your business in case of any legal issues.

Next steps: create a document retention policy

Depending on your filing circumstances, the IRS may be able to ask you for supporting documentation for three to seven years after you file a return. Shredding your documents is the best way to protect your business’s sensitive information and safeguard against identity theft. After the recommended time for retention has passed, you can manually shred your paperwork or find a local document shredding service that will handle the work for you. Businesses organized as corporations should keep some additional documents. These include board and shareholder meeting minutes, annual reports, corporate bylaws and amendments, and a stock ledger permanently.

The information below reflects the periods of limitations that apply to income tax returns. Unless otherwise stated, the years refer to the period after the return was filed. Returns filed before the due date are treated as filed on the due date.

It will also make life easier when you have to do taxes again next year. In fact, you can even sign up for electronic billing, which not only can help you stay organized, but can also help the environment by eliminating unnecessary waste. Another benefit to online billing is that you won’t have to remember how long you’ll need to hold onto the documentation, because many billing companies will do it for you. And because photocopies and scanned images of legal papers are usually not valid, think about storing original printouts in a fire-resistant safe. Luckily the IRS accepts legible electronic records, which can come in handy if you prefer to save things electronically. Just see that you delete any tax-related records from your electronic devices before trading them in or disposing of them to help protect yourself from identity theft and fraud.

Another great resource is your business bank account, which shows your income and transactions. Banks vary in terms of how long they allow you to access online statements, so it’s a good idea to download your statements each year. Requirements and laws for retaining records on employees who are injured in the workplace vary by state, and you should check with the responsible state agency for guidelines on keeping these records.