Most businesses don’t struggle with creating paperwork — they struggle with knowing what to do with it once it’s no longer useful.
Keep documents too long, and you increase your exposure to data breaches, identity theft, and internal misuse. Get rid of them too early, and you risk compliance issues, audits, or legal trouble.
The goal isn’t to save everything forever or shred aggressively. It’s to keep records for as long as they serve a legitimate business or legal purpose — and then destroy them securely.
This guide breaks that down in practical terms.
There’s No Single Rule — But There Is a Smart Approach
How long a business should keep documents depends on a few real-world factors:
- Regulatory and tax requirements
- Employment laws
- Contract terms
- Insurance and audit needs
- Whether a document is tied to an active dispute or investigation
That’s why most retention rules are expressed as ranges, not absolutes. The safest approach is to understand common benchmarks and apply them consistently across your business.
Common Business Records & Typical Retention Ranges
Below are widely accepted retention guidelines used by many businesses. These aren’t legal advice, but they’re practical starting points.
Tax & Financial Records
Typically kept 3–7 years, depending on the document.
Includes:
- Tax returns
- Supporting receipts
- Expense reports
- Profit and loss statements
Why: Tax authorities often review several years back, and amended filings or audits can extend timelines.
Payroll & Wage Records
Generally kept 3–4 years.
Includes:
- Payroll summaries
- Timesheets
- Pay rate histories
- Deductions and withholdings
Why: Wage disputes and labor audits can arise years after employment ends.
Employee Personnel Files
Often kept 3–7 years after separation.
Includes:
- Employment applications
- Performance reviews
- Disciplinary records
- Separation documentation
Why: These records can be relevant for employment claims long after someone leaves the company.
Contracts, Leases & Agreements
Usually kept for the life of the agreement + 3–6 years.
Includes:
- Vendor contracts
- Client agreements
- Commercial leases
Why: Contract disputes don’t always surface immediately after expiration.
Banking & Accounting Records
Commonly kept 3–7 years.
Includes:
- Bank statements
- Canceled checks
- Reconciliations
Why: These support audits, tax filings, and financial reviews.
Insurance Policies & Claims
Often kept for the duration of the policy + several years.
Includes:
- Policies
- Claims documentation
- Incident reports
Why: Claims can arise or reopen long after coverage periods end.
Customer or Client Records
Retention depends heavily on what information you collect.
Includes:
- Signed agreements
- Authorization forms
- Sensitive personal data
Why: Data privacy obligations don’t end just because a relationship does.
One Critical Exception: Legal Holds
If your business is involved in:
- A lawsuit
- A government inquiry
- An internal investigation
- An insurance claim
Stop all shredding related to those records immediately.
This is called a legal hold, and it temporarily overrides normal retention schedules. Destroying records under a legal hold — even accidentally — can create serious problems.
What Many Businesses Overlook: Retention Is Only Half the Job
Keeping records responsibly is important. Destroying them responsibly is just as important.
Throwing documents in the trash, recycling bins, or unlocked dumpsters creates unnecessary risk — especially for records that contain:
- Employee information
- Financial details
- Customer data
- Account numbers
- Signatures
Regulations around consumer and employee information don’t just address how long you keep records — they also expect reasonable measures when disposing of them.
That’s where secure shredding comes in.
A Simple, Repeatable Retention Workflow
You don’t need a complicated system. Most businesses benefit from something straightforward:
- Categorize documents by type
- Assign a retention range to each category
- Store records securely while retained
- Schedule regular, secure destruction
- Review retention practices annually
Consistency matters more than perfection.
If you’re looking for secure and reliable shredding services in Central New York, SimpleShred LLC works with both businesses and residents to make document destruction straightforward and compliant.
Call 315-684-9900 or email spalmere@aol.com
to learn more or schedule service.