If your business is drowning in paper, the Better Business Bureau (BBB) has some guidelines for what you should keep and how long to keep it. To protect your own and your customers’ identities, shred anything with private or financial information before you discard it.
A guide to documents that should be retained is below*. More resources can be found here.
Record Retention Guidelines for Businesses
(Source: Internal Revenue Service)
Permanent Records
- Accountants’ audit reports
- Annual Financial Statements
- Bills of sale for important purchases
- Canceled checks (for important purchases)
- Capital stock and bond records, other records dealing with the firm’s capital structure
- Cash books
- Charts of accounts
- Contracts and leases (major and/or current)
- Correspondence (legal and important matters)
- Credit history
- Deeds and mortgages
- Depreciation schedules
- Employee personnel records (after termination)
- Financial statements (year-end)
- General and private ledgers
- Insurance records
- Journals
- Minute books, bylaws and certificate of incorporation
- Pension records
- Property appraisals
- Property records
- Tax returns (along with related documents and worksheets)
- Trademark registrations
Seven Years
- Accident records and claims
- Accounts payable and receivable ledgers and schedules
- Canceled checks (unimportant payments)
- Contracts and leases (expired)
- Expense analyses and distribution schedules
- Expired option records
- Inventories (of products, materials and supplies)
- Invoices (customer and vendor)
- Labor records
- Notes receivable ledgers and schedules
- Payroll records and related documents (including pensioners’ payments)
- Plant cost ledgers
- Purchasing department copy of purchase orders
- Royalty computations
- Safety records
- Sales records
- Scrap and salvage records
- Stock and bond certificates (canceled)
- Subsidiary ledgers
- Time books
- Vouchers for payments to vendors, employee and related parties
- Excise tax computations
- Internal audit reports
- Time cards and clock records
Three Years
- Bank deposit tickets
- Bank reconciliations
- Correspondence (general)
- Employee savings bond registration records
- Employment applications
- Insurance policies (expired) - move to seven years
- Interim financial statements
- Miscellaneous internal reports
- Petty cash vouchers
- Physical inventory tags
- Purchase orders (not purchasing department copy)
- Receiving sheets
One year
- Requisitions
- Stenographer’s notebooks
- Stockroom withdrawal forms
The BBB is a non-profit organization that sets and upholds high standards for fair and honest business behavior. The BBB provides objective advice, free business Reliability Reports, charity wise-giving reports, and educational information on topics affecting marketplace trust. Please visit www.bbb.org for more information.
*The retention period is the number of years from the date the tax return was filed. All material presented is for general information only and should not be acted upon without professional assistance.