How Long Businesses Need to Maintain Copies of Important Documents

A paperless office sounds ideal, doesn’t it? Digital files increase efficiency and free up space. They also save time since they are easily searchable and shareable. So, why would you maintain document copies in a physical format? After all, there are backup hard drives, cloud storage, and other mass storage options for digital files. 

Actual files full of paper may seem outdated, but they are still a necessity in a well-organized and properly managed office. In fact, document management experts still recommend them as part of a comprehensive file management system. They generally believe a business should maintain important documents in multiple formats.

Some multiple-page documents, such as legal paperwork, are so infrequently accessed that it simply isn’t worth the time and effort to scan them. The same goes for the multitude of receipts businesses tend to accumulate. It’s easier to just toss them into a file than to spend time scanning them.

Why You May Need Hard Versus Digital Copies:

  • Properly stored physical records will remain readable for hundreds of years. Digital recording devices may become obsolete within a few decades. Remember microfilm, floppy discs, and cassette tapes? Each time documents are transferred from one digital format to a newer one, there’s the risk of degradation or even loss. 
  • Certain industries have specific requirements for what records can be kept digitally. They may require members to maintain document copies with actual handwritten signatures rather than digital signatures, for instance.
  • Hard copy storage is generally more secure. It’s not subject to network breaches, computer system crashes, viruses, malware, etc. 
  • Federal and state laws often determine how records in heavily regulated industries like medicine, law, and finance must be maintained.
  • Digital files are often accessed across multiple devices and in various formats. Ensuring sensitive information has been completely deleted is extremely difficult. Destruction is final when paper records are properly shredded and securely disposed of.

The right document management system blends both digital and physical record storage into a cohesive system that works to meet your business’ specific document storage needs.

How Long Must a Business Maintain Document Copies?

The Internal Revenue Service (IRS) requires everyone to keep records for a minimum of three years. In many cases, businesses are required to keep records for up to seven years. However, the IRS points out that other entities, such as creditors or insurance companies, may require you to hang on to them for longer periods of time.

In case of fire or another disaster, it’s a good idea to keep copies of important document files (both physical and digital) stored in a secure, off-site location.

Keep Physical Copies of These Records:

  • Building deeds
  • Promissory notes
  • Mortgage documents
  • Loan documents
  • All insurance policies
  • Business and other licenses
  • Articles of incorporation and corporate bylaws
  • Certifications
  • Vehicle titles
  • Legal documents, such as powers of attorney
  • Current receipts — those from within the last seven years

Documents of Specific Interest to the IRS

Anyone involved in a business startup needs to institute proper record-keeping from the start. This will ensure that you will receive the full amount of deductions you deserve while paying the taxes you owe.

Accurately keeping track of your business expenses allows you to claim all the deductions to which you’re entitled. 

The farmer’s tax guide applies federal tax laws specifically to farming and farm profits.

Net Operating Losses (NOI) determine how much you will be paying in taxes.

Tax records involving casualties, disasters, and threats allow you to document these events and claim deductions for expenses resulting from them.

Is Corrugated Plastic the Right Product for Important Files?

Corrugated plastic (or fluted plastic board) is a type of plastic cardboard comprised of layers of extruded polypropylene and polyethylene resins. Polypropylene, in particular, resists damage from many chemicals. Additives can provide other benefits, such as fire resistance, UV protection, and anti-static properties.

These widely used thermoplastics create a high-impact material that is flexible, durable, and recyclable. It’s also versatile enough to create a myriad of shapes by cutting, folding, stitching, or stapling it into whatever form you need. Thankfully, there are companies dedicated to the manufacture and sale of such products.

The unique qualities of corrugated plastic file boxes make them ideal for maintaining important document copies.

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