Don't get Boxed In
January is the month when many of us make, and maybe break, a few resolutions. But if one of your resolutions was to tidy up your document storage, procrastination could be a good thing.
Being too quick to destroy documents could get you in hot water with Canada Revenue Agency (CRA). Here are a few pointers to help you decide what's good to keep and what can actually hit the shredder.
- In general, you are required to keep supporting documents and records for a period of six years. You count those six years by starting at the end of the year to which the records relate. And remember, you count from your fiscal year, not the calendar year, if you are incorporated.
- If you were late filing, you must keep records for six years from the date of filing.
- Records are not just the general ledger. You need to keep all supporting documents — every invoice, voucher, statement, receipt, deposit slip, tax return, working paper, etc. You also must keep all payroll records.
- Electronic records may be fine, but you need to ensure they are in a format that is retrievable and readable. That actually applies to paper records as well — all records must be reliable and legible.
- A tip to make the storage room clean-up a bit easier: After writing the contents of the box somewhere on the container, add a line about when to destroy it. The person delegated to prepare boxes for shredding will not have to guess.
- When it's time to destroy old files, ensure all documents are properly shredded. If your in-office shredder can't handle the volume, there are companies that will do it for you at a reasonable fee.
If only breaking every resolution was this helpful.