The Importance of Document Retention

Posted on November 9 2010 by admin

Do you consider yourself a pack-rat? Or perhaps you are the type of person who throws everything away?

Either way, you might want to take a step back and reevaluate your system. While the “round file” may be the best place to immediately “file” junk mail and the like, when it comes to important documents, both personally and especially professionally, you should have a document retention policy.

Some documents you may be legally required to retain indefinitely, whereas others can be kept for a certain period of time. Henry & Horne provides our clients with a recommended guideline for various types of documents.

For a not-for-profit organization, having this policy in place is considered best practice. It is one of the policies the IRS inquires about on the Form 990. But just having a policy in place is worth about as much as the piece of paper it is printed on. You should set an annual date to go over your policy and all your documents. Consider it a spring cleaning, or a storage purge, where you go through all of your documents and destroy all those that have passed their retention period.

Just be sure to find a secure method of destruction – tossing them into the garbage behind the office is probably not the best idea (especially if the documents contain sensitive information such as personally identifiable information).

Katie Thomas, CPA

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Our Not-For-Profit niche is a strong team of experienced professionals who focus their work in the not-for-profit industry. Henry & Horne has been a stable local firm in Arizona for 55 years, and the Not-For-Profit niche has a long history of working with charitable organizations and other tax exempt organizations of all kinds. Our focus is exceptional client service and building relationships with our clients to promote communication throughout the year, not just at the time of the annual audit. We highly value and are very proud to be helping those who help others.

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