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Document Retention

Retaining business records is essential for legal purposes; however, all those records can really pile up after a year – let alone several! It is not necessary to keep things forever; document retention need only be for as long as required by law, after which document shredding is the best option.

The question then remains: how long should companies keep their documents? The answer to the question of document retention and when it is okay to destroy sensitive paperwork is vital today as more and more effort is given even by businesses to become paperless. The answer depends on the type of document involved.

Below are some recommended time frames for retaining different paper records, after which it is generally assumed safe to shred:

  • Minimum of Two Years – Regular business purchase orders; withdrawals from stockroom; notes from stenographers; and company budget plans/paperwork.

  • Minimum of Three Years – Trial balances from Accounting; receipts from bank deposits; records of any checking account reconciliations; bank statements; records/receipts from any daily sales; voucher/records of petty cash transactions; reports from any internal audits; former employee personnel files; applications from non-hired applicants; records/receipt from any entertainment activity; copies of insurance policies that have expired – exclusions noted below; and most routine correspondence.

  • Minimum of Four Years – Company financial statements; memos regarding any credit transaction; and any type of shipping or freight activity.

  • Minimum of Six Years – Reports of any fire inspection; records involving any group insurance disability claims; any records involving safety concerns; and original agreements of mortgages, notes, or liens that have been disposed of, terminated, or expired.

  • Minimum of Seven Years – Records regarding any settled accident case; the ledgers of any accounts payable and accounts receivable activity; logs of auto expenses; records of any banking debt deduction; bills of lading; records of any costs for business facilities; checks that have been canceled; books that are kept of cash transactions; records of commission activity; original copies of any leases or contracts that expired more than 7 years ago; records involving disability benefits for employees; records of terminated employees; time cards or daily reports of employees time worked; any employment tax records and reports; submitted expense reports of employees and others; records of business inventory; customer and vendor invoices; records/receipt from any cash sales transactions including merchandise; records/receipts of any type of permanent asset; any type of payroll reports, summaries and records of payroll activity including copies of W-2s, W-4s, 1099-Rs, reports of annual earnings, and payroll journals; records/returns of business personal property tax; records of sales and purchase orders; all records/returns of local, state, and federal sales tax activity; copies of the disposition of settled claims against any business insurance coverage; and records of any securities that are deemed worthless.

  • Records For Permanent Document Retention – Anything regarding Incorporation including Articles, bylaws and meeting minutes; records of any external audit or financial record report; copies of canceled checks for payments deemed important such as buying property, capital expenditures, taxes, and more: records or reports of business stock activity as well as registers of bond and capital stock transactions; an copy of currently in force leases or contracts; records of any business-related copyright activity; copies of all W-2 forms; copies of correspondence regarding any tax or legal business matters; copies of schedules of depreciated items; copies of insurance policies that do not have a statute as to filing a claim; copies of environmental coverage under expired insurance policies; any type of financial report or statement, especially year-end ones; original copies of journals and general ledgers; copies of contributions to and distribution of IRAs; any type of issued permit or license; inventory records of LIFO; records of business-related patents; reports of outside assessments of any business property; almost any record of the business physical property including blueprints, inspections, costs, etc; copies of any type of real estate transaction; all information regarding corporate tax returns including reports from revenue agents and how tax liability was determined; and records of the registration of trademarks.

Even as businesses move toward a more convenient, paperless office system, there will always be some need for paper documentation; with that comes the need for temporary or sometimes permanent document retention. Embassy RMS offers safe and secure document retention as well as confidential document shredding when that is allowed to help customers manage their paper records without becoming overwhelmed with storage space and issues.

For more information about document retention and document shredding services in the Brazos Valley, contact Embassy Records Management and Storage at (979) 776-3500!

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