Records Retention Guide for CPAs & Accounting Firms

Accounting firms and Certified Public Accountants (CPAs) deal with numerous financial documents, and many of those records need to be carefully maintained. While federal law requires you to keep tax documents and supporting records for three years, the IRS may audit records up to six years back in certain cases, so it’s important to keep that in mind when creating a record retention policy.

In addition, some records are best kept indefinitely while others can be cycled out after a year. Here, we’ll take a look at how long most records need to be maintained.

One Year

• Customer and vendor correspondence
• Deposit slip duplicates
• Purchase orders
• Notebooks
• Requisitions and stockroom withdrawal forms
• Receiving sheets
• Personal payment stubs
• Retirement and mutual fund contribution statements

Three Years

• Personnel records
• Employment applications
• General correspondence
• Expired insurance policies
• Internal reports, including audits
• Inventory tags
• Petty cash vouchers
• Employee savings bond registration records
• Time cards
• Credit card statements
• Medical bills
• Utility bills

Six Years

• Supporting documents for tax returns
• Accident reports and claims
• Accounts payable and receivable
• Tax-related medical bills
• Bank statements
• Cancelled checks
• Employment tax records
• Expense analysis and distribution schedules
• Expired contracts and leases
• Inventories
• Invoices
• Notes receivable
• Sales records and receipts
• Time books
• Vouchers and voucher registers/schedules
• Travel and entertainment records
• Payroll records
• Property and improvement records
• Purchase orders
• Wage garnishments
• Sold stock and bond records
• Anything else tax-related

Permanently

• CPA audit reports
• Legal records
• Tax returns, worksheets, and payment checks (including cancelled checks)
• Other important cancelled checks
• Corporate documents
• Account charts
• Cash books
• Deeds
• Fixed asset documents
• Depreciation schedules
• Current leases and contracts
• Year-end financial statements and balances
• General and private ledgers
• Journals
• IRS revenue agent reports
• Important correspondence
• Mortgages
• Bills of sale
• Property records and appraisals
• Pension and retirement records
• Patent and trademark registrations
• Director and stockholder minute books
• Investment trade confirmations

Other items are generally kept as long as they are relevant. For instance, car records should be kept until the car is sold, and warranty information should be maintained for the life of the product.

There are many ways to keep these records safe, but the most efficient is to use offsite records management services. Armstrong Archives provides various economical solutions that will ensure compliance with the law as well as readiness in the event of a dispute or audit.