Three little words can cost you a lot more money than you might imagine — and they have nothing to do with “love.” When it comes to keeping your business’s records, saving everything “just in case” can prove to be an expensive proposition.
Maintaining records — legal, financial, employment, etc. — beyond regulatory requirements not only costs time and money, but also may unnecessarily expose your business to litigation.
If you are keeping every scrap of paper or email simply because you may need it later, it’s time to change your M.O. A far better approach is to develop a record-keeping strategy and execute it according to plan.
What’s Required by Law
The records you should keep vary based on your business, industry, and location. But Diane Carlisle, executive director of ARMA International, a leading authority on governing information as a strategic asset, offers these basic guidelines:
- Business documents — Records that establish your right to conduct business, such as articles of incorporation and associated by-laws and business and tax-collection permits.
- Financial data — Records that reflect your financial dealings, such as accounts payable, accounts receivable, payroll records, and tax filings.
- Business agreements – Records that demonstrate your company’s obligations to your customers/clients, suppliers, and vendors (such as contracts), as well as to your staff (such as employee benefit packages and individual selections).
- Executive decisions — Records that show how business decisions were made and commitments honored, including annual reports, dividend records, board of directors meeting minutes and actions, and company health and safety documents.
- Regulatory compliance — Records that show you have met legal and regulatory requirements.
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