Businesses must maintain organized systems for retaining records, including tax and personnel files, and adhere to local or regional time constraints. Adequate storage space and electronic files can help, and outsourcing to a records storage management company can free up time.
Companies large and small are often faced with the challenge of maintaining an organized system of retaining business records. Generally, business documents are kept up to stipulated local or regional time constraints. Knowing the requirements for what to keep and for how long is considered crucial to having a proper records system.
Company size often determines the depth of a business records retention system. Some of the business documents kept include tax records and personnel files. The financial records usually kept by a business are operating expenses, capital purchases, sales receipts, and real estate assets.
A company should verify applicable business record retention requirements in the jurisdiction that governs the company’s industry. The requirements in the United States for retention of tax-related business records are that business documents be retained for at least three years. Some income requirements may require keeping financial records even after the recommended time.
Personnel records are generally kept for at least four years. These and other records are kept in a secure location, especially those that contain private information about former and current employees. Complete records of when payroll taxes were filed and paid are normally kept.
In most cases, financial records are kept for a minimum period of seven years. Statements from financial institutions, probate lists and annual income statements are some of the types of documents that can be included. Keeping good financial records can minimize a company’s exposure to legal issues.
Businesses may also find having a purge system to get rid of old or irrelevant business documents beneficial. A policy for a business records retention system can help streamline the process and ensure that all employees follow the same practices. This is usually part of the process of keeping proper business records.
It is generally a good idea to have adequate storage space if business documents are to be kept on site. It is also general practice to maintain an electronic file of business records. That way, pertinent documents are still accessible and the company can avoid downtime if a fire or other disaster destroys paper business documents.
Most companies can choose to use a records storage management company. This has the potential to free up the organization’s time to focus on business-related issues rather than managing the retention of business records. Any potential concerns with outsourcing the business records retention system can be reduced. A reputable company will usually outline their security features and practices for maintaining business documents.
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