Keeping records is an essential part of doing business, but it can also be confusing and even burdensome to small businesses, who are already trying to juggle demanding workloads. Although you canât skip your records keeping responsibilities as a business owner, you can find effective ways to manage them. Here is what you need to know about business record retention in NYC for your small company.
Retain the Source Documents
Ideally, the records you keep should be the original, source documents, rather than copies. For financial records, this means keeping canceled checks, cash register tapes, credit card slips, and financial statements from your bank. Corporate documents, such as meeting minutes, property mortgages and leases, charters, licenses, and copyrights, should also be original documents. If you need to produce this information for tax purposes or a legal case, having the originals can be very important.
Know How Long to Keep Records
Some documents, such as those that are related to establishing your business, should be kept indefinitely. Records retention for tax purposes is different. Generally, you should hold on to tax records for as long as the IRS could request them. Employee records should be kept for four years. Keep records of taxes owed for at least three years. The IRS has different rules for a variety of different business documents, which can be found on their website . Your business accountant can also help you determine how long record retention is necessary for financial documents.
Use Off-Site Storage
Not only does retaining records off-site make sense from a space perspective, but it is also safer and more secure. An off-site records retention facility will provide your important documents with greater security from fire, flood, theft, humidity, and other issues. Your records will also stay organized so that they are easy to access when you need them, and tracking software will let you know when the records were accessed and who accessed them, adding an extra layer of security.