If your business was audited, would you be able to find and retrieve information quickly and efficiently? Would you be able to prove that your records are in compliance with all necessary state and federal regulations? It’s never too late to put practices in place or make revisions to your current practices to keep your business in compliance. Consider the following:
- What to keep – This can be a challenge for many businesses, but mismanaging records can mean you’re not complying with certain laws and regulations. Consider keeping the following on file: financial statements, past employee records, accident reports, internal audit reports, purchase orders, expired insurance policies, accounts payable and receivable statements, payroll records and summaries. You may also want to consider keeping copyrights, trademarks, patents, audit reports of public accounts, year-end financial statements and property records including, blueprints and tax returns, indefinitely.
- How to securely store files – Many companies believe their files are secure but haven’t considered the impact of a disaster like a fire, hurricane or the wrong person getting their hands on files. All files can and should be backed up. Convert documents to electronic files and remember to back up your hard drive. To protect sensitive information from falling into the wrong hands, lock all files in a filing cabinet, safe or vault and password protect computers.
- How long to keep files – Talk with your legal and accounting staff to determine the length of time to keep specific records. Never assume it’s better to be safe than sorry when it comes to holding onto documents. During an audit, federal law says they can go through all of your records on hand, regardless of the age.
- How to discard files – When documents have reached their full retention period, it’s critical to securely destroy the records. Shred files whenever possible, including hard copy files, electronic media, hard drives, microfilm and x-rays.
What tips do you have that help keep your records in order and your business in compliance?
Photo by Mike Schmid