How Long Should I Keep Business Financial Records?

Certain business financial records must be kept indefinitely.

Keep As Long As You Will Need Them

According the IRS, keep financial records as long as needed to prove statements made on tax returns. The length of time to keep specific documents varies depending on what type of record it is. You can discard many documents within two to five years, but do not destroy business documents if you are unsure if you may need them. Seek professional or legal advice before destroying any documents that you are unsure can be legally discarded.

Keep Some Documents Indefinitely

Keep some items such as contracts, copyrights, patents, insurance policies and legal cases as long as the business is open. Keep original copies of these documents.

Bottom Line

Timing and function are important when destroying business financial records. Destroying too soon can cause legal problems, while holding onto for too long can take up valuable space. Consider scanning documents and keeping electronic copies when appropriate. It's also a good idea to audit records annually to ensure you are practicing optimal document retention procedures.

References

• IRS.gov: How long should I keep records?
• QBalance: Record Retention Table