RECORD RETENTION GUIDE FOR BUSINESS

 

 In business, good record keeping is essential not only for tax reporting purposes but also for the success of the company. The guidelines below give retention periods for the most common business records. Call us if you'd like more information or assistance with your record retention program.

  

      ACCOUNTING RECORDS                        RETENTION PERIOD    

      Accounts payable                                        7 years

      Accounts receivable                                    7 years

      Audit Reports                                               Permanent

      Chart of accounts                                        Permanent

      Depreciation schedules                               Permanent

      Expense records                                         7 years

      Financial statements (annual)                     Permanent

      Fixed asset purchases                                Permanent1    

      General Ledger                                           Permanent

      Inventory records                                        7 years2

      Loan payment schedules                            7 years

      Purchase orders (1 copy)                            7 years

      Sales records                                              7 years

      Tax returns                                                  Permanent

     

      BANK RECORDS                                      RETENTION PERIOD        

      Bank reconciliations                                   2 years

      Bank statements                                        7 years

      Canceled checks                                        7 years

      Electronic payment records                        7 years

     

      CORPORATE RECORDS                         RETENTION PERIOD        

      Board minutes                                            Permanent

      Bylaws                                                        Permanent

      Business licenses                                       Permanent

      Contracts - major                                        Permanent

      Contracts - minor                                        Life + 4 years

      Insurance policies                                       Life + 3 years3

      Leases/mortgages                                     Permanent

      Patents/trademarks                                   Permanent

      Shareholder records                                  Permanent

      Stock registers                                           Permanent

      Stock transactions                                     Permanent

     

      EMPLOYEE RECORDS                          RETENTION PERIOD       

      Benefit plans                                            Permanent

      Employee files (ex-employees)                7 years4

      Employment applications                         3 years

      Employment taxes                                    7 years

      Payroll records                                          7 years

      Pension/profit sharing plans                     Permanent

     

      REAL PROPERTY RECORDS               RETENTION PERIOD        

      Construction records                               Permanent

      Leasehold improvements                        Permanent

      Lease payment records                           Life + 4 years

      Real estate purchases                             Permanent

 

      1 Permanent for real estate purchases.

      2 Permanent for LIFO system.

      3 Check with your agent. Liability for prior years can vary.

      4 Or statute of limitations for employee lawsuits.