Records retention of financial data can get very complicated very quickly but I think it should be simple. I’ve studied different charts but it all can be divided into two categories: 7 years and permanent.
7 Years
- Bank statements & reconciliations
- Contribution records
- Accounts payable records
- Payroll detail
- And other financial detail records
- Commercial insurance records and payments (property and workers’ comp)
- W-2s, W-3s, 1099s, and 1096s
- General Ledger detail
- Monthly financial statements
- And other big picture records
- In a climate controlled environment such as a closet
- Above floor level so that rising water won’t damage them
- Behind a secure door which is keyed differently than all other building keys
- In boxes on shelves to make access in subsequent years easier
- Together by fiscal year and all permanent records need to be stored together
- And, the financial records storage closet can also be used to store items that just don’t fit in the finance office.
Each year, the oldest docs need to be shredded. I took the annual shredding chore and made it into an opportunity to help church members. I announced, especially to the senior adults, the day that shredding would happen and encouraged them to bring in old docs such as tax records and bank statements. The seniors were very grateful that the shredding could be done at no cost to them and it didn’t cost the church any extra either.
Shredding will cost less than $100 or you can see if your bank will shred your docs for you. Some businesses have “shredding parties” to draw new customers – take advantage of that even if you don’t become one of their customers.