As an entrepreneur, one of your many responsibilities includes keeping thorough financial records. But how many should you keep and what is the best way to organize them? Here are a few tips to help you manage this key aspect of your business:
Keep records for at least seven years.
- This timeframe will cover most issues involving taxes and financial reporting.
- Longer duration purchases and investments (such as a home) should always be kept for life of ownership + seven additional years.
Electronic records are allowed if done correctly.
- That said, it’s still recommended you keep the original receipts and paperwork and file them in a cabinet accordingly.
- For a specific list of accepted electronic records, see IRS revenue procedure 97-22.
Items worth recording / filing include:
- Cash register tapes.
- Bank deposit slips.
- Receipt books.
- Credit card slips.
- Canceled checks.
- Real estate closing statements.
Remember that no financial institution is obligated to maintain these records for you beyond a certain number of years, so it’s best that you do it yourself for future reference.