What paperwork do I have to keep?

 

Two popular television programs HGTV’s Mission Organization and TLC’s Clean Sweep show homeowners how easy it is to keep just about EVERYTHING by just organizing their possessions better. It is amazing how many plastic tubs have ended up in my house to try to accomplish this goal of keeping everything. Unfortunately, even plastic tubs begin to fill available space and the decision has to be made “What do I throw away?”

As a business owner or manager, we often have to make the same decision when it comes to important paperwork, such as old payroll timesheets, invoices, canceled checks, important files and even old tax returns. Our file cabinets and storage closets become maxed out. How much of this stuff do we really need to hold on to?

Recommendations for record retention

The IRS says to keep records as long as they may be needed to prove the income or deduction on a tax return. On a practical note, the makers of QuickBooks software have put together a comprehensive list of recommendations to assist business owners with guidelines on record retention such as:

Expense Reports – 3 years Time Cards – 2 years Tax Returns – Permanently

Accounts Payable Invoices - 3 years Accounts Receivable Invoices – 5 years Canceled Checks – 3 years

A complete list can be found at www.qbalance.com/Record_retention.htm

Keep them forever

Even better than using plastic tubs for record retention, electronically scanning your records can also be a useful tool for keeping those files accessible without taking up much space. Several thousand pages can be stored on a single DVD or portable harddrive.