It is important to do so as HMRC may request to see past records if there is any issue regarding your tax. The minimum period for which you must keep records is six years for VAT or five years from the latest date for filing your tax return.
Make sure you keep all documents that contain details of payments, receipts, credit purchases and sales, assets and liabilities. As a freelancer, should you get an accountant? Related blog. Which should I hire — an accountant or a bookkeeper? Their owners ensure that business records are intact and well-maintained. Software and electronic files are regularly backed up, payroll records and employee information is secure from prying eyes.
The business has a disaster recovery plan in place to protect business operations and important electronic documents. Keeping good records is fundamental in a successful business.
This article helps you determine which documents you should include in a Records Management Plan , how long you should retain them, and some things to consider for each type of Record or Document.
Business organization documents, such as charters, bylaws and constitutions need to be kept. Uusually as long as the business is in operation, if not permanently. Fictitious business names, corporate, partnership, limited liability corporations and other organization documents need paper or electronic records permanently stored for the life of the business.
By keeping these documents, the business owner avoids the risk of lawsuits or other legal issues that may arise. The IRS indicates that businesses need to keep records as long as they need to back up tax returns, audits and more.
When your business provides stock to the public, it needs to keep the documents issued by the U. Securities and Exchange Commission that provides the authority to issue stocks permanently. Companies that have boards and regular board of director meetings need to keep copies of all board minutes indefinitely. These records provide detailed information on what took place during the board meeting, voting records of important decisions and other pertinent information.
Along with the important information, it helps avoid legal issues that could arise about previous voting records or other important decisions. Public companies need to keep records of stock issued, stock transfers and stockholder information permanently.
The active phase of the lifecycle may be short for some records e. All records, however, move through the lifecycle and with time the retrieval rate often diminishes.
At some point, they reach a stage when they are not needed anymore in the primary office space but must still be kept for evidentiary, legal, financial, or historical purposes, as dictated by the retention schedule. This is when they enter an Inactive phase of the lifecycle. During this stage , we should free up space in our offices to new records, but we need to ensure keeping inactive records handy.
The objectives of this stage are:. Organize and list them. Retrieve only those records that are needed from time to time. Finally, at the end of the lifecycle, records enter the stage a decision is made usually based on an approved retention schedule on what happens with records that entered the final stage of their life.
It's called a Disposition phase. In the United Nations , there are two available disposition actions: either Archive or Destroy. Identify records with archival value permanent retention , list them, organize them and sent them to ARMS.
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