If we are lucky and if we do everything we are supposed to do, the business we create will thrive for generations to come.  In that amount of time a lot of paper will be generated from the day to day functioning of the business.  When it comes to any records pertaining to a business, how long should they be kept around?

There are various schools of thought on the subject.  I am a packrat so I would keep them as long as I had a place to store them.  You never know when you might need some obscure piece of paperwork from ten years ago.  A filing system is helpful to locate what you need in the great mountain that is your business records.  Here are some suggestions for the paper trail you are creating.

Some documents should be kept indefinitely.  As long as the business exists and thereafter, these items are at the center of your business structure and how you operate.  They are:  general accounting ledgers, mortgage and deed papers, yearly financial statements, payroll books, retirement records, and articles of incorporation (if they apply). 

Other documents that pertain to transactions and payments can be kept for at least ten years.  If anyone has a question about a sale or an old contract, they probably will have contacted the company within that time frame.  These documents include:  banking statements, invoices, written contracts, lease agreements on equipment and office space, accounts payable and receivable records, and cancelled checks.

A business can go through plenty of changes during its lifetime.  You may even be sued by a client, or you may sue a client.  Employees may have to be terminated and new ones hired in their place.  Company policy can change with the times.  And with inflation, everything gets more expensive eventually.

Items pertaining to employee records and any legal actions with anyone need to stay around for at least seven years.  If the employee is still with the company then their records need to stay for as long as they do and at least seven years after they leave.  A business that carries inventory will keep records for that as well.  Expense reports for executives, salespeople, and anyone else who travels and conducts business with clients on the company’s behalf are included in the seven-year pile.

Is there anything that can be gotten rid of sooner?  Well, memos to office staff, employment applications, and disability or other health-related documents for employees can be let go after three years.  If the person was never hired, then three years is good.  They may come back in that time and you can check and see that they applied before and discover the reason you didn’t hire them in the first place.

Records represent a history.  For your company, it is an important part of the evolution of the business.  Companies that can afford the storage and a huge filing system would not be doing a bad thing by keeping all records on a permanent basis.