Knowing what to keep (and for how long) is the foundation of a good management system.   But it is the management of these documents that will give you the peace of mind if and when you need documents for legal or tax reasons.  The emphasis is on quality and management versus quantity.  Eliminating the abundance of unnecessary paperwork saves valuable storage space.
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What business documents need to be kept and when can they be destroyed?
Business and Corporate Records – basic list
  • 3 years – Credit card statements, monthly financial and bank reconciliations
  • 7 years – AR and AP records, inventory, PO and sales records, property records/improvements
  • Life of document + 4 years – Insurance policies, lease payment records and minor contract
  • Permanent  – Bank statements, cancelled checks, fixed asset purchases, depreciation schedules, tax returns and related information, all corporate paperwork and major contracts.
Employee Records – basic list
  • 3 years – employment applications
  • 7 years – employee files, payroll and dividend checks, payroll records
  • Permanent – Benefit, retirement, pension and profit sharing plans

Read more HERE. And check back soon to find out why and where to keep all of these important documents!

Doing 2007 Taxes