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Are you storing business records long enough?

document_archiveGood records management is imperative in any business. Whether yours is a paper-based system, digital, or combination of both, the significant role it plays should not be underestimated.

Every business record has a life cycle and needs to move smoothly & securely through your business from the moment it's generated through a variety of stages until eventually requiring disposal. 
Prior to disposal, (and as you're probably well aware) you need to store your business records for some length of time. Business compliance in this area of document retention is currently going through some change, and it's important to understand exactly how long you are legally required to retain certain business records, as it can vary from one industry to the next.

We've compiled a list of some of the more common industries that our customers trade in, and summarised business compliance information for each in relation to how long you need to legally be storing business records. 

Record Type

Document retention

Further
information

Patient medical records

In NSW, at least 7 years from the date of last entry in the record. 
If the patient was less than 18 years old at the date of last entry in the record, you should keep the record until the patient turns (or would have turned) 25 years old.

Medical Council of NSW

Registered Charity financial
& operational records

In NSW, records must be kept for at least 7 years from the date that the recorded transaction, operation or act covered by the record/s are finally complete.

You should however be mindful of other laws that may require records to be retained for longer than this 7 year period (e.g. health records, documents that may be connected with potential litigation.)

Not for For Profit Law

Real Estate

In NSW, full transaction records, plus any other licensee business records as required should be kept for 3 years.

Legislation.nsw.gov.au

Financial Services

With a broad range of records requiring retention in this industry, most should be kept for 7 years from the last day of the recorded transaction, with only a few exceptions. Bright Law’s record retention checklist provides a thorough outline you can refer to.

Bright Law

 

Accounting

Taxation records should be kept for 5 years from either when they were prepared/obtained, or from the time of completion of the transaction that the record relates to.
Audit records should be kept for 7 years after the audit report/review date.

CPA Australia

Legal

The New South Wales Professional Conduct and Practice Rules 2013 (Solicitors’ Rules) indicates that a solicitor or solicitor’s law practice may destroy client documents after a period of 7 years has elapsed since the completion or termination of the engagement, except where there are client instructions or legislation to the contrary.

The Law Society of NSW

Public Sector

In NSW, there are a significant number of record classifications which are addressed in the State Records Regulation 2010 as part of the State Records Act 1998. Generally speaking, anything that is considered to have a ‘continuing value’ as noted in the SRR 2010 cannot be disposed of.

legislation.nsw.gov.au

Small Proprietary Companies

Companies must keep accurate written financial records for 7 years that explain transactions, financial position, business performance & allow true/fair financial statement to be prepared and audited.

ASIC

Small Businesses (General)

At a minimum, you should keep all your business transaction records for at least 5 years, with some to be kept much longer. You should still keep records for 5 years even after you sell, close or retire from the business.

Be sure to keep:
•Income tax  & GST records (sales, purchases/expenses & income tax year end)
•Employee payment records  (TFN declarations, worker payment records, PAYG summaries, superannuation, FBT information)
•PAYG withholding for business payments (where no ABN was quoted, voluntary agreements, payment summaries, annual reports)
•Fuel tax credit records

Australian Taxation Office

The information provided above was updated on 14 May 2015 and is general information which should be used as a guide only. It does not constitute legal advice. Compliance guidelines may vary within some industries noted above and states of Australia, and you should further investigate the relevant legislation if you are unsure.

While we've talked mostly about document retention, it's also important to note that in addition to being able to store records, you should also be able to retrieve records at any time should they be needed - perhaps for auditing or legal reasons. Whether your system is paper or ditigal based, your filing system should also be user-friendly so you don't spend any longer than you need to searching for (and accessing) documents. 

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