Good record keeping can cut your taxes and make your financial life easier.

In business, good record keeping is essential not only for tax reporting purposes but also for the success of the company. The guidelines below give retention periods for the most common business records. Call us if you’d like more information or assistance with your record retention program.

Accounting Records

Accounts payable 7 years
Accounts receivable 7 years
Audit reports permanent
Chart of accounts permanent
Depreciation schedules permanent
Expense records 7 years
Financial statements (annual) permanent
Fixed asset purchases permanent
General ledger permanent
Inventory records 7 years or permanent for LIFO system
Loan payment schedules 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
Cancelled checks 7 years or permanent for purchases
Electronic payment records 7 years

Corporate Records

Board minutes permanent
Bylaws permanent
Business licenses 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
Leasehold improvements 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 permanent

All records must be retained for at least the minimum period as stated in
an applicable state statute or federal law or regulation. State laws may vary
dramatically. Accordingly, your individual situation should be considered
when defining how long to keep your records. This handout is intended as
a tool. It should not be relied on or used as a substitute for professional
or legal research, advice or analysis. In no event should this handout be
construed as the rendering of advice or services by Bauman Associates, Ltd.