Almost any self-help guru will tell you to clear out clutter and simplify your life. This usually includes throwing away old papers and files that seem to pile up everywhere, never to be looked at again. But while it's true that we all need to dispose of unused or unwanted items every once in a while, tossing the wrong paper or deleting a necessary file can have dire consequences, especially for a business.

Welcome to the world of document-retention policies, which are guidelines to help you determine when to toss and when not to. The objective of a document-retention policy is to reduce the volume of paper or data in storage, meet legal requirements for record-keeping, and stem paranoia. Policies can vary greatly from general procedures to extremely specific instructions, and neither is necessarily right or wrong. What's important is to have something in place to help you determine what you need to keep and what is okay to trash.

The following chart provides some general guidelines pertaining to document retention and will serve as a good starting point if you feel that it's time to develop or re-evaluate your personal or company policy.

Accident reports and claims (settled cases)7 Years  Invoices to customers7 years
Accounts payable ledgers and schedules7 Years  Invoices to vendors7 years
Accounts receivable ledgers and schedules7 Years  JournalsPermanently
Audit reports of accountsPermanently  Minute books of directors and stockholders, including bylaws and charterPermanently
Bank reconciliations3 Years  Notes receivable ledgers and schedules7 years
Capital stock and bond records: ledgers, transfer registers, stubs showing issues, record of interest coupons, options, etc.PermanentlyOptions record (expired)7 years
Cash booksPermanently  Payroll records, summaries, and returns, including payments to pensionersPermanently
Charts of accountsPermanently  Petty cash vouchers3 Years
Checks (canceled, but see exception below)7 Years  Physical inventory tags3 Years
Checks (canceled for important payments, i.e. taxes, purchases of property, special contracts, etc. Checks should be filed with the papers pertaining to the underlying transaction)Permanently  Plant cost ledgers7 Years
Contracts and leases (expired)7 Years  Property appraisals by outside appraisersPermanently
Contracts and leases still in effectPermanently  Property records - including costs, depreciation reserves, end-of-year trial balances, depreciation schedules, blueprints, and plansPermanently
Correspondence (routine) with customers/vendors1 Year  Purchase orders (except purchasing department copy)1 Year
Correspondence (general)3 Years  Purchase orders (purchasing department copy)7 Years
Correspondence (legal and important matters only)Permanently  Receiving sheets1 Year
Deeds, mortgages, and bills of salePermanently  Requisitions1 Year
Depreciation schedulesPermanently  Sales records7 Years
Duplicate deposit slips3 Years  
Employee personnel records (after termination)7 Years  Sales tax returns7 Years
Employment applications3 Years  Savings bond registration records, sales, etc.7 Years
Expense analyses and expense distribution schedules7 Years  Stenographer's notebooks1 Year
Financial statements (end-of-the-year, other months optional)Permanently  Stock and bond certificates (canceled)7 Years
General and private ledgers (and end-of-the-year balances)Permanently  Stockroom withdrawal forms1 Year
Insurance policies (expired)7 Years  Subsidiary ledgers7 Years
Insurance records, current accident reports, claims, policies, etc.Permanently  Tax returns and worksheets, revenue agents' reports, and other documents relating to determination of income tax liabilityPermanently
Internal audit reports (in some situations, longer retention may be desired)3 Years  Time Books7 Years
Internal reports (miscellaneous)3 Years  Trade mark registrationsPermanently
Inventories of products, materials, and supplies7 Years  Voucher register and schedules7 Years
Vouchers for payments to vendors, employees, etc. (includes allowances and reimbursement of employees, officers, etc., for travel and entertainment expenses)7 Years