Out with the Old and In with the New .... Does Your Business Know What Records to Keep?

The new year means new files. But what do you do with the old ones? The IRS has established rules for what records to keep and for how long. The IRS guidelines below will provide you with retention periods for the most common business records.

Accounting Records

  • Accounts Payable  -  7 Years
  • Accounts Receivable  -  7 Years
  • Audit Reports  -  Permanent
  • Chart of Accounts  -  Permanent
  • Depreciation Schedules  -  Life of Assets Plus 7 Years
  • Expense Records  -  7 Years
  • Financial Statements (Annual)  -  Permanent
  • Fixed Asset Purchases  -  Permanent
  • General Ledger  -  Life of Business Plus 7 Years
  • Inventory Records  -  7 Years (Permanent for LIFO System)
  • Loan Payment Schedules  -  7 Years
  • Purchase Orders (1 Copy)  -  7 Years
  • Purchase Orders (1 Copy)  -  7 Years
  • Sales Records  -  7 Years
  • Tax Returns  -  Permanent

Bank Records

  • Bank Reconciliations  -  2 Years
  • Bank Statements  -  7 Years
  • Canceled or Substitute Checks  -  7 Years (Permanent for Real Estate Purchases)
  • Electronic Payment Records  -  7 Years

Corporate Records

  • Board Minutes  -  Life of Company Plus 7 Years
  • Business Licenses  -  Permanent
  • Bylaws  -  Permanent
  • Contracts (Major)  -  Permanent
  • Contracts (Minor)  -  Life + 4 Years
  • Insurance Policies  -  Life + 3 Years (Check with your Agent. Liability for Prior Years can vary.
  • Leases/Mortgages  -  Permanent
  • Patents/Trademarks  -  Permanent
  • Shareholder Records  -  Permanent
  • Stock Registers  -  Permanent
  • Stock Transactions  -  Permanent

Employee Records

  • Benefit Plans  -  Permanent
  • Employee Files  (Ex-Employees)  -  7 Years (Or Statute of Limitations for Employee Lawsuits)
  • Employment Applications  -  3 Years
  • Employment Taxes  -  7 Years
  • Payroll Records  -  7 Years
  • Pension/Profit Sharing Plans  -  Permanent

Real Property Records

  • Construction Records  -  Permanent
  • Leasehold Improvements  -  Permanent
  • Lease Payment Records  -  Life + 4 Years
  • Real Estate Purchases  -  Ownership Period Plus 7 Years