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Keep, Toss or Shred: A Small Business’ Guide to Keeping Paper Records

Even the smallest of small businesses go through a lot of paper. Depending on the kind of company you run, you might deal with client invoices, travel receipts, tax returns and even register tapes.

That’s a lot of record-keeping, and chances are you don’t have anyone on the payroll whose job it is to keep records. (Except you, of course.)

We want to help you take chaos and clutter and turn them into neat piles of paper – and a slightly fuller recycle bin. The following are different types of paper records you might come across in a given year, and whether you need to keep it, throw it away or shred it. (Or some combination of the three.)

Managing Your Small Business’ Paper Records

  • Tax Forms: Not only should you keep tax forms, such as W-2s, 1099s and annual returns, but depending on the type of form, you should hold on to them for three to seven years in case the IRS contacts you about them or audits you. Tax returns should be kept for three to four years, depending on which state you live in, while tax forms like a W-2 should be kept up to six years. When their time has come, shred these documents, as they have sensitive personal and financial information.
  • Supplemental Information: Keep any documents, receipts, mileage logs or other files that support deductions and credits on your taxes for at least three years. Once you’ve reached the three-year mark, it’s safest to shred them. However, you can just throw away (or recycle) any documents that don’t have specific information you don’t want to get out. For instance, cash receipts will have no sensitive information and can be tossed.
  • Customer Information: Any information pertaining to customers – whether it’s names, addresses, email addresses, telephone numbers or credit card information – typically should be stored digitally. However, if these are ever printed out, keep them only as long as needed for the specific purpose, then shred them.
  • Business Receipts and Purchase Documents: You should keep invoices, deposit information, cancelled checks, account statements and petty cash slips for at least three years for tax purposes. After that, you should shred them.
  • “Forever” Documents: A few documents (not all of them related) should be kept for the life of your business. For instance, audit reports, articles of incorporation, trademark registrations and property records should be kept indefinitely.

By properly sorting out your paperwork, you should be able to put a lid on the clutter in your office, which in turn should help reduce the chance that you’ll lose important documentation. But you can – and should – do more.

Going paperless not only is the optimal way to keep your small business organized – it can cut down on costs, too. If you’re not sure how to start, McManamon & Co. offers specific paperless office consulting in which we evaluate your current workflow, provide guidance on the best ways and tools to go paperless, and even help you out through the implementation phase, including on-site assistance.

Minimize the mess and reduce your costs by going paperless. Call us at 440.892.8900, or get in touch with us online to learn more.

Tags:  , , | Posted in McManamon & Co., paperless office, small business, small business taxes