A records retention schedule ensures that an organization keeps the records it needs for operational, legal, fiscal or historical reasons, and then destroys them when they’re no longer useful. You may base your records retention schedule on your own experience and research of legal mandates or on what other companies are doing.
Whatever your method, use your retention schedule as a guide, not as an executioner. Retain records longer if litigation, a government investigation or an audit seems likely. In the event that a legal action does transpire, immediately cease all disposal activities.
You have to know what you have and how long to keep it—legally and for your own business purposes—before you can establish an efficient records management system. That’s why it’s important to inventory your records and draw up a company retention schedule.
The retention schedule below reflects standard business practices. You must also consider state and local statutes of limitations as well as regulations of government agencies that pertain to your business. State retention statutes vary widely on tax, unemployment and workers’ compensation records, as well as on environmental and other requirements. Check with your state and regional authorities for details.
As an extra safeguard, have your CPA and your attorney review your records retention timetable before putting it into practice.
Timetable Tips
Whether you use the guidelines in this section or conduct your own research to establish a retention schedule, keep the following in mind:
- Don’t be a “just in case” hoarder; store records only for legal, operational or archival reasons.
- Retain and destroy documents systematically.
- Segment records according to a retention timetable.
- Don’t retain unscheduled temporary materials, such as drafts, reminder notes, work sheets or extra copies
- Don’t hang onto documents just for their sentimental or public relations value. Information must earn its keep, like any other asset. A comprehensive record of the past that fosters a “company memory” can be an asset, but be sure to minimize your legal liability while doing so.
When No Requirements Exist . . .
What can you do if a law does not state a specific retention period? This is not uncommon. There may not be a stated legal requirement for certain records, or the requirement may not include a specific retention period. You may have done a thorough search to locate certain records requirements but could not find any law addressing your particular documents. Or you may have discovered that certain records must be maintained, but you could not determine for how long.
Statutes and regulations often contain a phrase, “The following records shall be maintained . . . ,” but they fail to tell you the retention period. Usually the phrase is interpreted as meaning “permanently” because there’s no permission given for destruction of the records.
How do you deal with this quandary? Under the Uniform Preservation of Private Business Records Act (UPPBRA), whenever a law does not specify a retention period, businesses should keep their records for three years. If you destroy them sooner, you risk subjecting your organization to legal problems. However, only eight states have adopted this act or something equivalent. Courts could certainly require you to hold records long enough to permit the state to monitor compliance with its regulations—a “reasonable” period of time. Based on federal records and the UPPBRA, a three-year retention period should be sufficient.
How long should you keep records if you cannot locate any legal requirements referring to them? Assuming your legal research was thorough, it is best to maintain the records for three years. You must, however, document your search effort and the assumptions you used to set the three-year period. Then, if you missed a legal requirement during your search, you have documentation to show the judge or regulatory agency that your organization had made a good-faith effort to comply with the law.
RECORD RETENTION GUIDE
KEY: “P” = Permanent. Otherwise, figures represent suggested number of years for retaining each type of record.
Accounting and Fiscal Years
Accounts, charged off 7
Accounts payable ledger 7
Accounts receivable 10
Accounts receivable ledger 10
Balance sheets 5
Bank deposit records 6
Bank reconcilement papers 8
Bank statements 8
Bills collectible 7
Bills of sale of
registered bonds 3
Bill stubs 7
Bonds canceled 3
Bonds registered P
Bonds, sales or transfer 15
Budget work sheets 3
Building permits 20
Capital stock bills of sale P
Capital stock certificates P
Capital stock ledger P
Capital stock transfer records P
Cashbooks 25
Cash receipts &
disbursement records 10
Cash sales slips 3
Cash slips 3
Charge slips 10
Check records 7
Check register 10
Checks, dividend 10
Checks, expense 10
Checks, paid & canceled 9
Checks, payroll 7
Checks, voucher 6
Checks, warrants P
Correspondence, accounting 5
Correspondence,
credit & collection 7
Cost account records 7
Customer ledger P
Donations 7
Drafts paid 8
Earnings register 3
Entertainment, gifts &
gratuities 3
Estimates, projections 7
Expense reports, departmental 7
Expense reports, employees 7
Financial statements, certified P
Financial statements, periodic P
Fixed capital records P
General cashbook 25
General journal P
General journal supporting
papers P
General ledger P
Notes, canceled 10
Note ledgers P
Payroll register 7
Petty cash records 3
Plant ledger P
Profit & loss statements P
Property asset summary 10
Royalty ledger P
Salespeople commission
reports 3
Stock ledger P
Tabulating cards &
magnetic tape 1
Traveling auditor reports 15
Trial balance, accounts
receivable 3
Trial balance sheets P
Uncollectible accounts 7
Work papers, rough 2
Administrative
Audit reports, internal 10
Audit reports, public &
government P
Audit work papers, internal 6
Classified documents: control,
inventories, reports 5
Correspondence, accounting 5
Correspondence, advertising 3
Correspondence, credit & collection 7
Correspondence, engineering &
technical 10
Correspondence, general 3
Correspondence, personal 6
Correspondence, production 2
Correspondence, purchase 5
Correspondence, sales & service 1
Correspondence, tax 15
Correspondence, traffic 6
Forms control 5
Inventory cards 3
Inventory, plant records P
Organized charts P
Requisitions 1
Research reports 20
System & procedure records P
Telegram & cable copies 3
Telephone records P
Advertising
Activity reports, media schedules 5
Contracts 6 yrs. after termination
Contracts, advertising 6 yrs. after termination
Correspondence 5
Drawings & artwork P
Estimates 2
House organs P
Market data & surveys 5
Samples, displays, labels, etc. P
Tear sheets 3
Corporate
Annual reports P
Authority to issue securities P
Authorization & appropriations
for expenditures 6 yrs. after
termination
Bonds, surety 10
Capital stock certificates P
Capital stock ledger P
Capital stock transfer records P
Charters, constitution, bylaws
& amendments P
Contracts, employee 6 yrs. after termination
Contracts, government 6 yrs. after termination
Contracts, labor union 6 yrs. after termination
Contracts, vendor 6 yrs. after termination
Dividend checks 10
Dividend register P
Easements P
Election ballots 20
Election records, corporate 10
General cashbooks, treasurers’
and auditors’ 25
Incorporation records & certificates P
Licenses, federal, state, local P
Permits to do business P
Records of mergers, consolidations,
acquisitions, dissolutions &
reorganizations P
Reports to Securities and
Exchange Commission P
Securities: documents of issuance,
listing & registration P
Stock applications for issuance P
Stock certificates, canceled P
Stock, stock transfer &
stockholders’ records P
Stockholder minute books,
resolutions P
Stockholder proxies 10
Stockholder reports P
Voter proxies 15
Executive
Correspondence 2
Policy statements, directives P
Projects, ideas, notes P
Research reports 20
Speeches, publications 10
Insurance
Accident reports 11
Appraisals P
Claims, automobile 10
Claims, group life & hospital 4
Claims, loss or damage in transit 7
Claims, plant P
Claims, workers’ compensation 10
Expired policy, accident 3 yrs. after expiration
Expired policy, fidelity 3 yrs. after expiration
Expired policy, fire 3 yrs. after expiration
Expired policy, group 3 yrs. after expiration
Expired policy, hospital 3 yrs. after expiration
Expired policy,
inspection certificates 3 yrs. after expiration
Expired policy, liability 3 yrs. after expiration
Expired policy, life 3 yrs. after expiration
Expired policy, marine 3 yrs. after expiration
Expired policy, property 3 yrs. after expiration
Expired policy, surety 3 yrs. after expiration
Expired policy, workers’ comp 3 yrs. after expiration
Legal
Affidavits 10
Charters P
Claims & litigation of torts &
breach of contract P
Copyrights P
Mortgages P
Patents & related data P
Trademarks P
Manufacturing
Authorities for sale of scrap 3
Bills of material 5
Blueprints 30
Correspondence, engineering
& technical 10
Correspondence, production 2
Credit memoranda 5
Credit ratings & classifications 2
Drafting records 8
Draftings & tracings, original P
Inspection records 5
Inventory records 7
Invoice copies 7
Invoices, received 7
Job records 10
Journals P
Ledgers P
Operating reports 10
Order register 6
Production reports 6
Quality control reports 5
Receipts, delivery 3
Reliability records P
Specifications, customer P
Stores’ issue records 3
Time & motion studies P
Tool control 5
Work orders 5
Personnel
Accident reports, injury claims,
settlements 7
Applications, changes,
terminations 3
Attendance records 4
Clock records 4
Correspondence 6
Daily time reports 5
Disability & sick benefits records 4
Earnings records P
Employee contracts 7
Employee service records P
Fidelity bonds 3
File, individual employee 3
Garnishments 7
Health & safety bulletins 4
Injury frequency charts 10
Insurance records: group, employee 6
Medical folders, employee 30 yrs. after termination
Paychecks P
Payroll records, after termination P
Pension plan P
Pension plan, applications P
Pension plan, claims P
Pension plan, correspondence P
Rating cards 5
Salary & rate changes 10
Salespeople auto records 2
Salespeople expense accounts 4
Salespeople performance records P
Time cards 7
Time tickets 7
Time tickets, receipted 7
Training manual P
Union (collective bargaining)
agreements after termination P
Withholding, exemption certificate 3
Workers’ compensation reports 11
Plant and Property
Appraisals P
Damage reports 7
Deeds, titles P
Depreciation schedules P
Inventory records 16
Leases P
Maintenance & repair, buildings 10
Maintenance & repair, machinery 5
Plans & specifications P
Plant account cards, equipment
records, historical folders P
Purchase, lease records 1
Sales 7
Space allocation records 2
Taxes P
Water rights P
Purchasing
Acknowledgments 3
Bids, awards 3
Contracts 6 yrs. after termination
Correspondence 5
Exception notices 6
Orders 7
Purchase orders 3
Purchase requisitions 1
Quotations 3
Receiving reports 6
Receiving slips 4
Vendors’ contracts P
Sales and Marketing
Claims (loss or damage) 5
Complaints 5
Contract progress reports 6 yrs. after termination
Contracts, customer 6 yrs. after termination
Contracts, representatives,
agents, distributors 6 yrs. after termination
Correspondence 1
Discount rates 5
Guarantees, warrantees 6
Invoices, copies 6
Invoices received 7
Mailing & prospect lists 2
Market research studies & analysis P
Market surveys 5
Orders acknowledgment 4
Orders filled 8
Price lists P
Shipping notices & reports 4
Tax-exempt sales 5
Taxation
Agent’s reports P
Annuity or deferred payment plan P
Correspondence 20
Depreciation schedules 3
Dividend register P
Employee withholding certificates 8
Excise reports 5
Exemption status P
Inventory reports 16
Real estate 15
Sales & use P
Social Security P
Tax bills & statements P
Tax returns & working papers P
Traffic
Aircraft operating & maintenance 10
Bills of lading 3
Delivery reports 3
Drive vehicle inspection reports 3 months
Employee travel 1
Export declarations 4
Freight bills 5
Freight claims 5
Leases 6
Manifests 1
Receiving documents 5
Routing records 1
Shipping instructions 6
Shipping tickets &nb
