How long do you need to keep business records?

Question

For a company that is incorporated, how long do you need to keep all the business records (i.e.: customer invoices, vendor invoices, cleared checks, computer generated reports for month end/year end, etc.)?

My friend has a business that he bought from his father in the beginning of 2000, however he and his brother were partners in the business prior to him buying them out in 2000. He has tons and tons of old papers, reports, invoices (customers & vendors), etc. that date back to 1980. I'm trying to clear out files of paperwork that is unnecessary and cluttering the office drawers, cabinets, etc. as there is no room left in file cabinets or anywhere.

I recall hearing 7 years but I want to make sure.

Thanks for all of your answers! :o)

Answer 1

I recently asked our accountant this exact question. She gave me a guide that she printed from the IRS website. Check it out.

www.irs.gov

I think it shows most everything you referred to.

Answer 2

It depends on the type of business. Usually retired/closed files are 7 years for law firms. You should probably check with the department that regulates the type of business you are taking about, though (i.e., California State Bar, Department of Real Estate, etc.)