Housekeeping for Your Business Records
By: Connie Holt, E.A.
The Henssler Financial Group Position Paper

Occasionally, it is necessary to take time to do housekeeping for your business. Housekeeping tasks may include destroying old files in storage that are no longer needed or cleaning up your hard drive to make your computer more efficient. These are chores no one really likes, but will be beneficial to you if you make the time to do them.

Here is our recommended "Business Housekeeping To Do" list:

Organize your filing system:

• Make separate files for each:
  • Payroll timesheets/cards, reports/records, deposits, and tax returns by period (purge annually);
  • Paid invoices alphabetically by vendor name (purge annually);
  • Sales records by period (purge annually);
  • Deposit records by period (purge annually);
  • Bank statements and check stubs by period (purge annually);
  • Client invoices alphabetically by client name (purge annually);
  • Financial statements (purge annually, keep year-end statements with permanent business operating files), and
  • Business operating files, such as building or equipment lease, insurance policy, etc. (keep in current files permanently, or until new lease/policy replaces old one).

    Purge — remove from current files to box up for storage
    Periods — time frame of work cycle, such as monthly, quarterly or annually.

• Box up your old files for storage:
  • Keep accessible until tax return is filed; then move to storage;
  • Number the boxes, prepare a contents list that can be placed in the front of each box, and save this information on the computer — Contents list should include (as applicable):
    • Box number;
    • Department, client type, etc.;
    • Client name;
    • Description of contents;
    • Date to storage;
    • Dates of contents, and
    • Destruction date.
• Convert your old address book or rolodex to computerized records.

Purge old files from storage and destroy:

• Use the following Recommended Business Record Retention list to determine when files can be destroyed (not thrown away), and
• Check with any applicable industry regulatory agencies that might govern your type of business. Regulatory agencies have requirements on length of time you must keep records. These could be different from the following general retention list.

Clean up your computer hard drive:

• Copy old documents to a CD for storage, and delete from the hard drive;
• Remove programs no longer used, and
• Run performance maintenance programs to improve efficiency.

These are general recommendations that pertain to most businesses. If you have specific questions that are not addressed in this article, please contact The Henssler Financial Group Tax & Accounting Division at 770-428-4025.

Recommended Business Record Retention Time Periods

Indefinitely

Audit reports from accountants; Cash books; Chart of accounts; Checks (canceled for important payments, i.e., taxes, etc.); Construction documents; Correspondence (important); Deeds, mortgages, bills of sale, titles Depreciation schedules; Financial statements (end-of-year, other months optional); General and private ledgers (and end-of-year trial balances); Journals; Licenses; Loan documents, notes; Minute books of directors and stockholders, by-laws and charter; Property appraisals by outside appraisers; Property records: depreciation schedules, blueprints and plans, and Trademark registrations.

11 Years

Worker's compensation documents.

Expiration + 7 Years

Contracts and leases still in effect.

7 Years

Accident reports and claims (settled claims); Accounts payable ledgers and schedules; Accounts receivable ledgers and schedules; Bank reconciliations; Bank statements; Checks (canceled, see exceptions above); Contracts and leases (expired); Electronic fund transfer documents; Employee personnel records (after termination); Expense analyses and expense distribution schedules; Inventories of products, materials, supplies; Invoices to customers; Invoices from vendors; Notes receivable ledgers and schedules; Payroll records and summaries, pensions, payroll taxes; Petty cash vouchers; Purchase orders (purchasing department copy); Receiving sheets (receiving department copy); Sales records; Scrap and salvage records (inventories, sales, etc.); Subsidiary ledgers; Tax returns/worksheets, documents relating to income tax liability; Time books/cards; Voucher registers and schedules, and Vouchers for payments to vendors, employees, etc.

5 Years

OSHA logs.

3 Years

Correspondence (general); Employment applications (from applicants not hired), and Insurance policies (expired).

1 Year

Duplicate deposit slips.