Organizations often hold on to records that are no longer needed. These records take up valuable storage space and cost money that could otherwise be saved. Adhering to a retention schedule helps businesses operate more efficiently to save time, money and space.
“While it may seem easier to keep everything, this is actually a losing strategy,” said Sarah Koucky, Senior Director of Security and Compliance for Cintas Document Management. “Saving unnecessary records costs both time and money. By setting retention schedules and policies, organizations will remain compliant with government regulations and can expedite the destruction of out-dated records to ensure a clutter-free system.”
The following retention schedule is a general recommended guideline for certain files and documents. Consult your legal advisor for specific retention schedules appropriate for your business and records.
- Accounts payable – 7 years
- Accounts receivable – 7 years
- Audit reports – Permanent
- Bank reconciliations – 3 years
- Bank statements – 7 years
- Cancelled checks – 7 years
- Electronic payment records – 7 years
- Employee files (ex-employees) – 7 years
- Employment applications – 3 years
- Employment taxes – 7 years
- Expense reports – 7 years
- Financial statements (annual) – Permanent
- Insurance policies – Permanent
- Leases/Mortgages – Permanent
- Loan payment schedules – 7 years
- Payroll/Labor records – 7 years
- Purchase orders – 7 years
- Sales records – 7 years
- Tax returns – Permanent
It is important to safely and securely dispose of all documents that are no longer needed. With identity theft and data breaches on the rise, doing so will protect confidential information from falling into the wrong hands.
Many organizations use a secure shredding service that destroys business documents onsite on a scheduled basis. These companies place secure storage containers in accessible and identifiable locations to make it safe and convenient for all employees to properly shred documents.
In addition, businesses that have a large volume of records with long retention rates but limited space can consider an off-site storage and imaging provider. This will free up space and ensure all electronic and physical records live in a secure environment. All documents can be retrieved on-demand and properly destroyed if required.