Record Nations Articles

Successful businesses have several things in common. Their owners ensure that business records are intact and well-maintained. Software and electronic files are regularly backed up, payroll records and employee information is secure from prying eyes. The business has a disaster recovery plan in place to protect business operations and important electronic documents. Businesses understand the risks of not saving certain types of files because they know they're responsible for proof in all legal or tax matters. Keeping good records is fundamental in a successful business. This article helps you determine which documents you should include in a Records Management Plan, how long you should retain them, and some things to consider for each type of Record or Document. What Documents Should be Managed, Scanned, and/or Destroyed in your Records Management Plan? Here's a short list of records that should be kept long-term for any sized business. If you're running out of room in your filing cabinets, you should consider contracting with an offsite records storage company to help you store inactive files securely that can be accessed at any time. Business Organization Documents Business organization documents, such as charters, bylaws and constitutions need to be kept. Uusually as long as the business is in operation, if not permanently. Fictitious business names, corporate, partnership, limited liability corporations and other organization documents need paper or electronic records permanently stored for the life of the business. By keeping these documents, the business owner avoids the risk of lawsuits or other legal issues that may arise. Especially when questioning the company's ownership and organizational structure. Annual Reports It's a good idea to keep copies of annual reports for your business indefinitely. These reports summarize the business' activity for the year and help to prove the businesses position for any prior years. The IRS indicates that businesses need to keep records as long as they need to back up tax returns, audits and more. When your business provides stock to the public, it needs to keep the documents issued by the U.S. Securities and Exchange Commission that provides the authority to issue stocks permanently. This prevents any legal issues that could arise if the government asks for these documents and you don't have them. Meeting Minutes Companies that have boards and regular board of director meetings need to keep copies of all board minutes indefinitely. These records provide detailed information on what took place during the board meeting, voting records of important decisions and other pertinent information. Along with the important information, it helps avoid legal issues that could arise about previous voting records or other important decisions. Stockholder Shares Public companies need to keep records of stock issued, stock transfers and stockholder information permanently. Any legal disputes that arise about who owns what part of the company or stock are easily resolved when these records are kept. Businesses can spend years in legal battles sorting out issues that can be resolved by retaining these important documents. Financial Brokers or Investors For businesses that deal in the stock market, the Securities and Exchange Commission requires the business to keep detailed records of all financial transactions. This includes account statements, trade confirmation, cancelled checks and other documents related to investments and trading. A broker or financial investment officer might be penalized by government agencies for not keeping these records on hand for the required periods. Accounting and Financial Statements Every business needs accurate accounting records and financial statements in case of an IRS audit. An IRS audit can go back several years. Without these documents available, a business has no way to prove expenses or deductions. When you can't prove or back up your tax returns through your accounting records or financial statements, your business might be subject to additional taxes, fines and penalties. Business Receipts In addition to financial statements and accounting records, businesses need to keep copies of receipts associated with expenses. This is especially true when it comes to travel expenses, employee educational reimbursements, meal and entertainment expenses and receipts for business automobiles. By keeping records on hand the required amount of time, usually up to seven years, your business can avoid the risk associated with IRS audits, fines and penalties. Payroll Records As long as the business is operational and has employees on staff, payroll records need to be kept indefinitely. Additionally, the employer needs to ensure they are secure from those who don't have access to them. Employee's private medical insurance information, tax records, social security number and all payroll information needs to be retained by the business. By having these available, the small business can avoid any issues or risk associated with payroll. The IRS requires keeping employee tax records for at least 4 years, if not more. Electronic Documents It doesn't matter if a business' record-keeping practices include moving paper documents to electronic formats. The requirements for electronic documents are the same as paper ones. By scanning documents electronically, a business can reduce its need for added record-keeping storage space. While it's important to keep specific documents in paper format, businesses save money by moving its paper files to electronic means of storage. Bank Statements and Check Registers To substantiate financial transactions of the business, keep bank statements and check registers for the life of the business. Check registers can easily prove a check was issued and a business expense incurred. However, only destroy these records if you decide to close the business. Keep them available until the business is no longer at risk of an IRS audit. Get Free Quotes on Storage & Retrieval Services Information governance is an ever changing field as federal and state laws require more retention and faster discovery. We can help you manage your hard-copy documents, and even guide you through the transition to a paperless office. Our experts can help you maintain your storage needs regardless of format. Let us help you find the right document storage solution for your business. To get free, no obligation quotes from a records management company in your area, fill out the form on the top right of this page, or give us a call at (866) 385-3706. If you’d like to learn more about records storage and management, visit our articles section or check out our blog!

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