How far back should I keep records?
An old client reached out to me about a sale I made over 6 years ago, but I didn't hold records that far back. What's an appropriate amount of time to keep records of your business and/or clients?
It depends on which country you live in and their appropriate statutory laws. A good rule of thumb is 7 years, however this can vary according to the nature of records.
As a starting point, take a look at the following resources:
For the United States see (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-long-should-I-keep-records).
For Australia see (https://www.ato.gov.au/Individuals/Income-and-deductions/Records-you-need-to-keep/How-long-you-need-to-keep-your-records/).
For the United Kingdom/Europe (http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/vat/records-keeping.htm#4).
You may wish to seek professional advice in regards to your particular situation - a local practitioner may be in a better position to advise you accordingly.
Hope this helps.
My database tracks client interactions back to 1994--almost the beginning of my business. (This has nothing to do with tax records.) Every once in a while somebody I haven't talked with for years will contact me. They are very impressed when I can quickly check my DB and say, "Oh yeah, we talked back in 2002 about your management issues. How has your business grown since then?"
Why would any business ever get rid of such customer records? I've never had anybody threaten to subpoena my old records so they could sue me.
A lot of legal records and tax records must be kept for 7 years. Something like sales should be kept in a CRM for as long as possible. 6 years is a long time and the clients shouldn't expect that you still have that information. A few years would be a reasonable amount of time, but with today's technology you should keep it as long as possible.
Depends on your business, in regard to sales and warranties, and project time lines.
What I do is I keep the current and the previous 2 years information live. and the rest is archived. this includes emails.
With regard to CRM data, it's all kept live. a customer / contact is for life.
as you never know when your paths will cross again.
With regard to tax I meet the legal requirements + 2 years.
With projects and or contracts / agreements I keep them for life. as E- Copies.
Which is really no big deal. and very easy to keep on external hard drives / flash drives or even DVD.
The general rule of thumb is whatever the tax man wants you to do. So as everyone noted 7 years. Anthony provided the links to the legal response and Canada would be seven years for the tax man. As for sales I know major multinationals that have them going back longer much longer. What is it you sell and that is the life expectancy of the product, I would let that guide you but 7 in minimum
I keep my tax records for 7 years. My real estate business and clients records I kept forever!
Hi Jack. You must normally keep records for at least 6 years from the end of the last company financial year they relate to. You may need to keep records longer if: they show a transaction that covers more than one of the company's accounting periods.
I hope this helps.
In house I keep 3 years hardcopy and warehouse back to atleast 10 - Ofcourse I have floppy disk that date back to the mid 70s and 80s...
As long as I am in business, I keep everything! This has nothing to do with tax or legal requirements. This has to do with building, developing and maintaining strong relationships with clients.
You have to keep certain records for 7 tax years here in NZ so if that had been here then the record would have been kept.
You only need to keep records for 5 years, unless the transaction has capital gains tax implications, in which case, if the sale was within the last 5 years, you need to keep records going back to when you purchased the item that you sold up to 5 years ago. Capital gains are usually on larger cost items but can include things like company shares. However, depreciable items are usually excluded unless you sell it for more than it originally cost you.
So the bottom line is, that it depends on what exactly you sold. If the sale was in the process of trading (e.g. you sold inventory) then you only need to keep records up to 5 years, otherwise, the above paragraph applies.
Warranty commitment is another thing but according to my practicing keep record about fifty to sixty years back because one interesting thing techniques and fashion are back every fifty years,...so this data help you in a many way,...
It is best to hold records on everyone with a flashdrive going back as far as 10 years.
generally speaking , records need to be destroyed after three years. However if they are important and have archieval value they may be retained for 10 years.In this case the client would be unfair to expect you to keep records as far back as 6 years
I note that most of the answers cover the various legal requirements of the countries concerned but my guess is that the answer you want is exactly as expressed by Mike Van Horn. I use a Cutomer Relationship Management tool to record all interactions with customers and my customer satisfaction survey is linked to this as well. That way I know what, where and why but also, and very importantly, how happy the customer was.
If he/she is an good customer, electronic media should allow you to back as far as necessary...Keeping good records is a requirement for any successful business and why did this customer come back after 6 years?
I usually recommends keeping digital records of everything, even 20 years back, if possible. Regardless of your specific episode, keeping track of what you did can always show you the best roadmap for your future.
You've got a ton of good recommendations here. As long as you have a written record retention policy and sick to it, legally you are covered. For service elements like you reference here you may want to operate according to customer demand. I'm sure it doesn't come up often but when it does, it helps to have a policy in place. A better question may be, "How do you manage the documents you keep?" A good document management system is critical to today's businesses. I'd be happy to discuss this with you if you're interested and can even perform a free analysis for you. Let me know!
To start with, classify and separate your records by categories and include the reasons you are keeping records as part of your organization system. I have found that holding on to records is fine as long as the space and security measures are in place to keep them, but once in awhile you will have to "clean house" if you keep building a client base. Also, contact information and POS designations should be in some type of system where you can look back over the past five to ten years.