Small Business Questions & Answers

Dear Buried,

So your office looks like a landfill—and you're worried that the Army Corps of Engineers will soon be dispatched to eliminate this threat to public health and safety? Never fear, we will save you from the wrath of the EPA.

The age-old dilemma of record retention requirements hasn't gotten any easier, even with the advent of electronic storage possibilities. Even if you religiously keep as many of your business records as possible on your computer and diligently back those records up regularly, you'll still need to retain a great deal of hard copy records for varying periods of time. The secret to minimizing the sheer bulk of this necessary evil is to know when it's safe to throw stuff out.

There is no single statute of limitations for the many categories of records a business needs to hang on to for awhile. The federal and state governments don't always agree and the rules seem to change from year to year. Requirements also vary widely depending on what specific industry you're in. So much for adopting a scientific remedy.

The art of effective record retention boils down to two standards: reason and risk. Some business owners fear risking adverse consequences and hang on to everything forever, an unreasonable behavior resulting in landfills such as yours. Others trash everything early and often, an unreasonably risky path to neatness.

To guide you in minimizing your risks, here's a list of generally accepted, reasonable time periods recommended for retaining business records which you may print out for future reference:

Remember that these are just guidelines. Apply them reasonably to minimize the risks in your individual circumstances.