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In business, we’re often told to save important documents. Unfortunately, what tends to happen is people end up saving every receipt, bill, invoice, credit card statement, and piece of junk mail.
Having all of these documents can create a mess and leave your office or workspace in a state of disorganization. That’s why it’s important to destroy your old business documents on a regular basis. Ideally, you should shred old and useless business documents through a shredder or something similar.
If you’re unsure which documents you should shred and destroy, we’ll go over some common ones in this post.
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Old Finance Documents
For finance documents, we’re going to lump in anything that involves some type of business transaction or where money is involved. These can include, but are not limited to:
- Financial statements
- Old Invoices
- Canceled checks
- Paid bills
- Old bank statements
With old finance documents, you might want to keep some of these documents around for a year or two, mainly if they will affect you come tax season. Beyond that, you don’t need to keep them around. Some of these related financial documents will be outdated quickly and won’t be too relevant.
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You might be thinking, “What if I need to show proof of purchase?” In a case like that, you can keep an old receipt around, but it would have to be for something big or important. For example, you might want to keep your receipt for a bunch of new and expensive computers you bought. But you don’t need to keep receipts for smaller office supplies such as a few staplers.
This is probably one of the more obvious ones, but you should get rid of junk mail as soon it arrives.
It’s bad enough to get junk mail in your personal at-home mailbox. However, you probably get tons of junk mail at your business address.
What might not be as obvious is that you should shred any junk mail with your vital information or credit card offers. What people tend to do is throw out this type of junk mail without destroying it, but that is the wrong approach.
You want to shred these documents so no one could potentially use them for nefarious purposes. For example, if someone were to find an old credit card offer in your name in the trash, they could find the means to open a new credit card in your name without your consent.
Another hypothetical situation is someone could use your old junk mail to commit identity theft. It’s bad enough these companies have your information. But not destroying these documents also gives a chance for identity thieves to get hold of it.
Old Tax Documents
So this is somewhat similar to old financial documents. However, there are notable differences between old tax information documents and finance documents.
The biggest one is you want to keep old tax records for at least seven years. These can be documents like tax-related checks, receipts, statements, and W-2 forms.
Now, old tax documents carry a lot of conditionals. That is, you actually might want to save them for a longer period of time. For example, if you have employees working for you for longer than seven years, keeping a physical copy of their old W-2 forms might be necessary.
You also should not get rid of tax returns. While in some cases you can get rid of them after three years, at other times, you’ll need to hold onto them indefinitely. One factor that separates tax returns from other documents is that they tend to be harder to reacquire if you ever need a new copy.
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So you might still be unsure whether to destroy certain documents or not, and that’s fine. If it’s a document you’re not clear on but still want to keep, you can upload it to a computer database.
Additionally, you should consider how easy it would be to get a new copy of an old business document if you destroyed it. For instance, it would be easy to get a new credit card offer in the mail. However, it wouldn’t be as easy to get a document that showed legal information like an LLC operating agreement.
Don’t feel the need to save everything, but do take precautions when destroying old business documents.