Record Keeping – What Do You Keep? What Do You Toss?

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We’re cleaning up our home office this weekend and sorting all the paperwork. What goes to storage? What gets shredded? What do we keep?

I know a lot of people are in that same boat right now as they sort through everything for tax season. Here are some tips that I’ve used to keep my records straight.

Keep two sets of files. No, not two sets of books – two different types of files. They are permanent files and temporary files.

The permanent files are just that – permanent. Keep your business paperwork here. That includes your operating agreement, by laws, articles of incorporation, stock transfer registry and anything related to your business structures. Don’t forget to keep proof of your state filing requirements and your minutes too.

Also keep copies related to assets of the company. For example, if you buy a building, you’ll want to have one or more files devoted to the closing statement, loan docs and improvements to the building.

The other type of files are temporary files. These are the files that you will shred at some future date. Keep invoices, cancelled checks, customer receipts and the like in these.

At a minimum keep these files for 5 years. It’s better to keep them 10 years, though, because there can sometimes be a statute of limitation that may run that long.

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