To Keep or Not to Keep. Recordkeeping 101.


Two months into the new decade, and, pretty much, feels just like the last decade, only moving faster! In preparing for the new year, I start by organizing my recordkeeping from the past 12 months. I do this every December.

I actually enjoy it, now. There was a time, I procrastinated as long as my proactive mind would let me. Back even just 15 years ago (beginning of last decade-time flies!) and I had physical filing cabinets, yes more than one. It took me hours, to pull manilla folders, shred the stuff I had no idea what it was for, and never should have kept, create new folder labels, stuff the overflowing manilla folders into a box, and jam the lid on, securing it safely with a roll of packaging tape. Then I had a bin that I filled with papers to shred. I either hired a company to shred those documents, or wait until a local business had a shred day for anyone wanted anything shred. That usually was 3-4 months into the year. In the meantime, I prayed a fire won’t start, because that container would have been great kindling.  It started out quite time consuming, but with a procedure and software improvements, I actually don’t spend a fraction of the time anymore. 3 hours and I am done, start to finish and that includes getting set-up for the new year filing system.

I start by sorting the files in my cloud filing ‘cabinet’; I create new files in my cloud filing ‘cabinet’ to archive and purge details and scan in the papers to add to my records ,because no matter how hard I try, there are always papers, right!. I create the new folders for the new year. While I now have only one small physical cabinet in my office, which truth be told, I could even go down to just a box or drawer, it does keep details organized and easy to find quickly.  These are the documents that will either be shred or scanned into the cloud, at the end of each year.

The two main question I get asked repeatedly, are, ‘How long should I keep my records?’ ‘What records should I keep?’

When determining what to keep and what to shred, I use a very basic guideline.

What will I need in 6 month, 2 years, 5 years, forever?  What is the best process for storing those records? The answers can vary between personal records and business records. Focusing on recommendations for business recordkeeping, here is what I recommend.


  • Permanent set of books for your business to summarize individual deposits, disbursements and items of adjustments, also to including the basis or cost of capital assets. You can use whatever system you want to capture these details. QuickBooks is an extremely popular program, due to being very user friendly, but also allows accurate timely recording of details. It has many versions available for businesses of all sizes and industries to utilize efficiently. Contact a QuickBooks Pro Advisor for further assistance and discounts on the software.
  • Supporting documents could also be needed for journal entry validation, should your tax returns be examined by the IRS.
    • Bank Statements, including cancelled checks, payroll records, invoices, and loan documents.
    • Rule of Thumb-if you write a check, and decide not to send it, mark it void. You should have record of every check in the number sequence, whether it was processed, or voided.
  • Receipts-keep those easily accessible for 6 months or so in the event you would need to return something or need proof of purchase. After that, each year you should review the details from 7 years prior and determine what you can archive, or shred if it is a paper copy.
  • Store all documents in a safe cloud storage system. Scan in (there are so many easy ways to do this with your phone. It takes longer to take the picture than it does to save it.) all documents that you need to support your tax return. The cloud never fades like thermal paper can, and should something catastrophic happen to your office, the details will still be obtainable. I recommend that everyone keep a copy of their insurance details in the cloud also.
    • Cloud storage does come with a small cost, usually based on capacity. But compared to the rent you pay on the square footage of your file room, there are much better uses for your office space and better for your bottom line to pay rent for a cloud.
  • If you fail to retain enough records to support your tax return details, the IRS can reconstruct your income using one of several methods, including estimating increased net worth, looking at bank records, or estimating raw materials used in manufacturer. Whichever method is used, you will have the burden of proof if you dispute the changes.
  • Click here for a chart to help with the recommended record retention periods.

Keep all supporting documents at least until the statute of limitations until that particular tax year has passed. Then SHRED all paper copies that you are disposing. NEVER just throw documents away into the garbage. Have you ever driven down the freeway and seen papers blowing everywhere? Those could be papers from your garbage, with your name, address and other vital information on them. Identity Theft is real and on the rise.

New year, new decade, new thinking. Start today to create processes that last through growth and regulation changes. While you may need to make adjustments, you will have your procedures in place to create the necessary changes. Contact us for assistance in developing time efficient, cost effective procedures.


Tammy Stifel
Bookkeeping | New Businesses | Quickbooks
p. 515.988.7532


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Services include:

Providing daily, weekly, monthly or occasional BOOKKEEPING SERVICES. We assist to the degree that meets your needs and your budget. We provide you with a clear picture of your finances.

  • Handling A/P and A/R entries, monthly financial reports, yearly audit assistance, state banking regulation audits, payroll processing, sales tax filing, and developing and implementing work-flow systems to ensure documentation requirements are accurate and complete.
  • Creating the foundation for a cost-effective accounting system for NEW BUSINESSES, and those working to get more established, then providing customized, agreed-upon bookkeeping services contracting with clients for a clear understanding of the services to be provided.
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    Examining financials to provide DECISION-MAKING INFORMATION regarding financial department personnel needs, resources and timing for product and service expansion, financial strategies for real estate or asset purchases, etc.
    MANAGING your books in a way that allows YOU to do what YOU DO BEST, sell your product or provide your services, while staying as involved in the bookkeeping as needed for proper management of your financials.
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OrganizerForU offers a 20- to 30-minute complementary phone consultation. We value your time and we know that time efficiency is cost effective. During our call, we listen as you describe the current financial situation of your business, asking the right questions to determine how our services can meet your needs. We take time to briefly explain how our services are provided, to ensure we are a good fit for your needs and situation.

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