We live in the digital age where the vast majority of our correspondence and records are kept on hard drives and/or in the cloud, but that doesn't mean physical documents aren't still important. While we can certainly save a lot more paper than in the past, your business should still keep certain documents in hard copy form.
Documents You're Legally Required to Display
Research what documents you are legally required to display by the government. Check with your federal, state, and local government to be sure you are in complete compliance with all necessary display documents and posters and have them printed and hanging where visible to employees and customers as necessary.
Business License
You'll also want to keep a physical copy of your business license, which you'll likely also want to display to show the legitimacy of your business to customers or potential clients.
Tax Documents
Keep physical copies of all your tax returns from the beginning of your business through the present. In fact, it's a good idea to keep hard copies of any tax-related documents. T he IRS says you should keep your records until the period of limitations expires. This is the period of time you have to amend a tax return.
Contracts
You should keep hard copies of contracts whether they are with employees, clients, or suppliers. You may need these for reference if terms are broken or if a legal issue arises. Even if you just want to revisit and revise terms, it's a good idea to have the original contracts physically accessible.
Receipts and Invoices
Keep receipts and invoices, whether from your sales or your own purchases. If customers wish to return products or dispute services, you may need to reference them. You may also need receipts for tax itemization purposes or in the event of an audit by the IRS.
Incorporation Articles
S-Corps and C-Corps should have articles of incorporation on hand so they can be presented when needed. If you’re seeking financing from banks or investors, for example, they will likely need to see these, and digital copies may not be adequate.
Operating Agreements
Operating agreements should be kept in physical form."Always keep a copy of your operating agreement handy," says Chris Tierney of Moore Colson CPAs and Advisors in a Forbes article.* "This document outlines who at the company can make critical business decisions, such as the ability to borrow money, the ability to negotiate contracts, and the like. This tells the world who's in charge. If disaster strikes, this can help you get things done quickly when you need to engage companies to help at a moment's notice."
Lease Agreement
Ensuring you are able to continue operating in your place of business is imperative, so make sure to keep a hard copy of your lease agreement. You never know when you might run into a dispute with your landlord, and while a digital copy might be easy to reference, the physical copy can be presented as needed without having to locate the right hard drive or digital folder.
Payroll Records
You'll also want to be able to locate payroll records in case an employee or contract worker has issues or if you need to make sure someone was paid correctly and/or that the correct amounts were withheld. These may also need to be referenced at tax time.
These are certainly not the only types of business documents you may wish to keep in hard-copy format, but they are the ones that should definitely be maintained in print. To protect your business and for convenient access, don't rely on digital copies 100 percent of the time.
