Safe and accessible storage of important documents is an essential part of every business and with increasing amounts of red tape and regulations it’s all too easy to be totally focussed on the latest files and documents. However, you never know when the Inland Revenue, customer, client or your own accountant may need some information from old or historical documents. That’s why it’s essential to have some sort of organised, accessible document storage system in place.
If you’re asked to produce a copy of a document from a particular time period you need to know exactly where it is and if you can’t produce a readable copy of that document when an official from the VAT office or Inland Revenue come calling, you may be subject to fines. It could even be old personnel files or HR records that are needed. Whatever record is requested, you as a business are required to provide a readable copy.
Hopefully you’ll never encounter tax or legal problems, but if you do and you can’t provide the requested documentation it can cause all sorts of problems, so careful thought as to where you store your files is needed.
As a general rule, most business related documents should be kept for 6 years. So, sufficient business document storage space is important and a logical filing and labelling system is essential. If you have the space to store all your files on site that’s great, but in today’s world of internet home based businesses many don’t have that option. Fitting in an extra filing cabinet is not an option – there’s simply no more space! Another solution is needed, especially if your business is continuing to expand. The garage or loft may be an option, but when you start putting all the normal household things in those places too, will you be able to get to that all important paperwork?
Right now some of you may be thinking that it’s OK, you can scan all your documents and keep them electronically on hard drives or disks to reduce space. To be fair very few records now need to be kept in paper version so it is an option. As long as you can produce a readable copy from any electronic records, that’s fine. But realistically, while many of us think about this, how many actually do it? You’ve either got to pay someone to go through all your records for the last 6 years or so, or make time to do it yourself. Face it; it’s very likely the files will end up in archive boxes. If you are disciplined enough to digitise your records, remember, the hard drives or disks need to be kept somewhere safe. In addition, technology moves on so you will need to review and ensure that whatever device your records are held can be plugged in and the data retrieved.
That’s where good dry, secure self storage facilities come in. Most providers will have units of varying sizes so you can increase and decrease space as your requirements change. If you decide to take the self storage option remember to file and stack properly. Label the box contents clearly on the outside and don’t overfill them or stack them too high; you may need to find something at short notice. If using digital hard drives and you have more than one, make sure you have a clear record of what is contained on each drive. Whether you’re storing paper files or digital hard drives, you will also need to keep an inventory of which files are kept at your business premises and which files are held elsewhere and don’t forget to check if you need to let HMRC know if you’re moving files.
To help you work out how much business document storage space you need, here’s a quick check list of the standard business records you need to keep
Tax and financial records
Accounts, Tax and VAT returns and bank statements are the most obvious records to keep. But you may also need to keep receipts relating to expenses, national insurance documents, VAT paperwork, pensions and any share option records. There’s a HMRC guide to keeping records for tax purposes here.
Health and safety records
All businesses, except those with less than five employees, must keep accident records to record any injury at work. In addition, if you’re in an industry that requires health surveillance checks (normally businesses where employees are exposed to noise, vibration, fumes etc. then these records need to be kept for 40 years. If you’re in this type of business then you need to think seriously about how and where these records will be kept.
The Health and Safety Executive (HSE) can provide you with more information on the records you need to comply with health and safety laws.
When it comes to employee records there are a multitude of records to be kept: employee personal details, what they earn and any documents relating to wages, salary and National Insurance. Training documents, appraisals, holiday and sickness records are also recommended for retention. The length of time will depend on each type of document. Pay, tax and national insurance records will need to be kept according to the overruling company tax requirements, whereas more general information like sickness records, staff appraisals etc. may vary but must comply with the Data Protection Act. The ICO document here will help you work out what you need to keep and for how long.
If your business is based in the North Bristol, Stroud or Gloucester area and you’re beginning to run out of document storage space, get in touch to see how we can help.
Image credit: Samuel Zeller