Spring Cleaning: What Financial Records to Keep and What to Throw Away

Spring Cleaning: What Financial Records to Keep and What to Throw Away

When it comes to financial papers, an approach of “better safe than sorry” can lead to a whole lot of clutter. Tax season is coming to a close, and spring is upon us; it’s time to rummage through those mounds of financial records and other important documents and determine what financial records to keep and what can go.

Here is a quick overview of how long you should keep those important documents:
Safe to Dispose of (optionally, keep permanently):

• Bank Deposit Slips (after reconciling statements)
• Certificates of Deposit (after maturity)
• Loan Documents (when repaid)
• Term life Policies (after term expires)
• Savings Bonds (after maturity)
• Car Title (when car sold)
• Warranties (after expiration)

Keep Permanently:

• Birth Certificate
• Death Certificates
• Marriage License
• Military Discharge Papers
• Social Security Card
• Loan Discharge Notices
• Employer Defined-Benefit Communications
• Permanent Life Policies
• IRA Contribution Records

Keep for One Year:

• Canceled Checks (7 years if needed to support tax filings)
• Check Registers
• Check Statements
• Credit Card Statements (7 years if needed to support tax filings)
• Pay Stubs

Keep for Seven Years:

• Brokerage Statements (after securities sold)
• Receipts (if needed to support tax filings)
• Purchase Confirmations and 1099s (after securities sold)
• Tax Returns and Supporting Documents
• Paperwork on Charitable Donations
• Investment and Real Estate Records (after you sell)
• Bank Statements

Keep Indefinitely:

• W-2 Wage and Tax Statement (until you start receiving social security)
• Receipts for Big Ticket Items

When You Receive a New One:

• 401k Statements
• Social Security Statements
• Bills for Non-Deductible Items
• Insurance Policies

Dispose of Old Copy When Updated:

• Health-Care Proxy
• Living Trust
• Living Will
• Power of Attorney
• Will
• Insurance Inventory

Every household must work out it’s own records management system, but some general guidelines can help. This is not necessarily a fully comprehensive list. However, it gives an idea of what can go and when. If you are confused or unsure about a document it’s best to check with your accountant before disposing of it.

This information was provided by:
Mary Ellen Hall EA
Rauker, Scheinfeldt & Company, Inc.
Auburn, MA
Phone - 508-832-4085
Email - Mary Ellen
Website - Rauker, Scheinfeldt

Courtesy:  My Senior Portal

Internal Controls Review

Internal Controls Review

Companies should start by identifying the weaknesses in their financial processes and structures that make fraud easy, such as a lack of internal controls, loopholes in business processes, or the easy availability of check stock on-site.

Management should consider implementing some or all of the following:

• Separation of duties -- so that no one employee has sole control of the entire process.
• Manual controls -- so that fraud can’t slip by as part of an unmonitored process.
• Limited access to accounts and the ability to make payments -- so that staff can’t manipulate systems they’re not supposed to, and so that you’ll know exactly who could have made potentially fraudulent entries or changes.
• Require double signatures -- so checks can’t go out on the fraudsters say-so alone.
• Get daily check reports -- so that frauds can be caught quickly.
• Securely store check stock.

“Everything someone needs to steal money from your company or a client is right there on the check,” Lacerte noted, before adding that, while securing check stock was important, it would be far better to move beyond paper checks entirely. “Paper is one of the biggest problems when it comes to fraud. You have to go paperless.”

Electronic invoicing and payment solutions like Bill.com and others not only eliminate the weak spot of having check stock in the office -- they also offer many opportunities for limiting access, monitoring payment activity, enforcing payment controls and separation of duties.

Source: accountingTODAY

Rene Lacerte, Las Vegas (November 05, 2013)