9 Types of Records You Should be Keeping as a Business Owner
Both federal regulations (FLSA, FMLA, EEOC, ADA, ERISA, OSHA, and IRS regulations, among others) and state laws (for example, state unemployment and discrimination statutes) impose strict recordkeeping requirements on small businesses. Without getting into the specific requirements (which could fill up a whole book or two), it is important that you set up a file as early as possible, in which you keep copies of ALL of your business records, particularly the following:
Ledgers, invoices, authorizations, balance sheets, banking records, budgets, cash books, expense reports, financial statements, profit/loss statements, etc.
2. Corporate Records
Incorporation/organization documents, partnership or joint venture agreements, bylaws, amendments, annual reports, audit reports, stock certificates and ledgers, contracts, correspondence, meeting minutes, etc.
3. Fixed Assets
Inventory records, plans and blueprints, real estate records, depreciation schedules, etc.
4. Human Resources
Employee personnel files; attendance records, benefits records, family and medical leave, garnishments, profit sharing agreements, pension plan agreements, workers compensation, etc.
Policies, appraisals, fire inspection reports, claims, safety records, etc.
Contracts, permits, licenses, copyright and trademark registrations, patents, titles and deeds, bills of sale, leases and mortgages, claims and litigation, legal correspondence, etc.
Checks, commission reports, time reports, W-2 Forms, contractor files, time reports, vacation/sick pay records, etc.
Income tax returns, sales tax returns, payroll tax returns, inventory reports, depreciation schedules, cancelled checks, etc.
Company vehicles, travel documentation, client entertainment expenses, etc.
Almost all of the above records are REQUIRED BY LAW to be kept for a certain number of years – in most cases, it’s 7. But, because the statute of limitations on contracts can run anywhere between 2 and 10 years, depending on the state whose law applies, we always advise our clients to hang on to their records for at least ten years (as any of the above could come up in a contract dispute and we’d hate to not have evidence). Doing so will exhaust all possible statutes of limitations, and will keep the owners safe under federal and state statutes. The only exception is if your employees are exposed to hazardous materials – in that case, keep the records relating to any such exposure for at least 30 years after the employee leaves.