PKF Texas: The Entrepreneur’s Playbook® - Document Retention

Greg tells you which documents you need to hold on to and which you can let go.

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Greg Price
Episode: 248
March 06, 2010

Summary:

How long should you keep supporting documents? State statutes vary and some documents should be kept indefinitely. Greg Price gives tips for establishing your document retention strategy.

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Greg: This is Greg Price with PKF Texas' Entrepreneur's Playbook.

What is your company's document retention policy? If the answer is "keeping everything forever," you may be opening yourself up for headaches down the road.

How long should you keep your financial reports and supporting documents? From a tax compliance standpoint, the federal statute of limitations will begin on the due date of the return or when you file your company's federal return whichever is latest. The federal statute of limitations runs for three years. State statutes vary by state. Most companies consider a date between five and seven years for holding records. Check with your tax advisor re your status.

There are documents that should be kept indefinitely. These records include annual federal and state tax returns, articles of incorporation, certain year-end payroll filings, etc.

Take an audit of the critical documents that exist within your company and have a plan for tracking, accumulating, storing and destroying those documents. Use a similar process for electronic documents and communications.

Any document retention plan you develop should be reviewed by legal counsel for completeness. Remember, a document retention program is only as good as you maintain it. Therefore, the key is to have a well documented policy, train your employees on the policy and follow it to the letter.

To read and comment on the PKF Texas' Entrepreneur's Playbook, visit my blog, fromgregshead.com. And be sure to check out the new mobile ready website at PKF Texas.com - PKF Texas, The Fit That's Right!