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May 16, 2021

How Long Should You Keep Financial Records (And When Should You Shred)?

While many offices are making strides toward becoming paperless operations, there is still likely to be an abundance of paperwork generated within any organization on a daily basis. From HR files to financial documents, these papers can contain sensitive information that, in the wrong hands, could cause harm to your business, your employees, or your customers. At PROSHRED® San Diego, we focus all of our efforts on providing secure and convenient shredding services to help businesses like yours. These services aid not only with office organization and cutting back on clutter but also compliance with confidential record retention and destruction laws.

Something else to note is that our services are not just for businesses or organizations that generate a large volume of paperwork. If you’re like a lot of us and your kitchen counter is littered with paid bills, bank statements, receipts, and other financial information, you might want to consider a shredding service to help you get organized and keep your personal information out of the trash, where it could make you susceptible to identity theft or fraud.

A question we get a lot from all sectors, whether residential or business, is how long it’s recommended to hold onto sensitive records before having them securely shredded with an ongoing shredding service or a one-time cleanout. While the answer typically depends on the type of record, there are a few main guidelines to help you get a rough idea of when it’s time to schedule your next shredding service.

How Long to Keep Tax Documents

Tax records are one of the most important records you or your business deals with. The Internal Revenue Service recommends that individuals and businesses keep tax returns and related documents for seven years after filing. This is to ensure that if the IRS has any questions about previous filings or decides to audit you within their allotted time frame, you have those records on hand. It’s also best practice to continue to hold onto tax returns after this time has passed, in case you need to refer back to them in the future.

Because tax records have a lot of sensitive information pertaining to you or your business, it’s best to use a professional paper shredding service to destroy your documents and keep you safe from fraud or identity theft.

For other kinds of financial documents, there are loose guidelines about how long to keep records, but you should always check the legislation in your state or industry to make sure you’re keeping records for the recommended amount of time.

Recommended Shredding Guidelines for San Diego Businesses

What You Can Shred After One Year:
Receipts for Smaller Purchases
Purchase Orders
Delivery Receipts
Deposit Slips
Other Transaction Records

What You Can Shred After Three Years:
Expired Insurance Documents
Obsolete Correspondence with Vendors and Customers
Employment Records
Employment Applications

What You Can Shred After 7 Years:
Tax Records
Insurance Claims
Legal Documents
Accounts Payable Ledgers
Cancelled Checks
Expense and Travel Reports and Receipts
Payroll Records

What You Should Keep Indefinitely:
There is nothing saying you can’t keep as many of your records as you deem appropriate. Storing these documents in an organized filing system or indexed on a computer can be an effective way to keep everything you need at your fingertips, but it’s not often necessary. The items you need to hold onto forever can be summed up in a few categories:
Profit and Loss Statements
Financial Statements
Meeting Minutes
Bylaws and Corporate Charters
Business Formation Documents
Deeds, Mortgage Documents, and Property Records
Trademark and Patent Registrations
Audit Reports

Other Recommendations
Some items can also be shredded on a daily, weekly, or monthly basis. This includes junk mail, receipts for small purchases, and paid credit card or utility bills.

Like we mentioned above, these are just a few guidelines for how long to retain business records and financial documents. If you feel like you may need a document in the future, there is no harm in holding onto it or scanning it into a system for future reference. Just make sure that you securely shred anything that might contain sensitive or confidential information to prevent fraud.

Recommended Shredding Guidelines for San Diego Residents

What You Can Shred After One Year:
Cancelled Checks
ATM Receipts
Bank Transaction Receipts Receipts
Pay Stubs
Credit Card Receipts for Large Purchases
Social Security Statements
Investment Statements

What You Can Shred After Three Years:
Receipts for Major Purchases
Medical Records
Medical Bills
Expired Contracts
Expired Insurance Policies

What You Can Shred After 7 Years:
Real Estate or Vehicle Sale Records
Loan Payoff Documents
Accident Reports
Tax-Related Bills or Receipts

What You Should Keep Indefinitely:
Active Contracts
Current Insurance Benefit Documents
Health Records for Major or Ongoing Procedures
Annual Statements for Investment Accounts
IRA Contribution Records
Current Loan Documents
Warranty Information for Large Purchases like Cars, Appliances, etc.
Mortgage Statements

Items such as birth certificates, Social Security cards, certifications, citizenship papers, military discharge papers, marriage licenses, wills, and death certificates should not only be held onto permanently but stored in a secure place so that the information is never compromised.

Other Recommendations
Some items can also be shredded on a much more regular schedule, such as paid bills, junk mail, credit card offers, and receipts. As we mentioned for businesses, there is no rule saying you can’t keep documents for as long as you’d like. If you’d like to keep your records but clean up the amount of physical papers in your home, PROSHRED® San Diego offers document scanning services so you can quickly convert all of your files to digital.

Secure Shredding for Financial Documents: PROSHRED® San Diego

When you decide it’s time to get rid of obsolete documents that are taking up valuable space in your office, don’t just throw them away. Placing documents in the trash that could potentially contain information about your business, your employees, or your clients could spell disaster. Using a commercial office shredder can be a solution, but those shredders can be expensive to maintain and take valuable time away from your employees. For secure shredding for your financial documents and business records, trust PROSHRED® San Diego. We offer document scanning services to help you make the move from paper to digital files, and we’re dedicated to providing the most secure mobile document shredding services that will help keep your business in compliance. For affordable shredding services with no hidden fees or surcharges, give us a call today! 1-858-492-9600

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