Record keeping is an essential part of field service projects because it creates a contemporaneous history of what happened at what point during the course of a project—which can be referred to if necessary. There are several reasons for record-keeping which include:

• Legal requirements (e.g. taxes);
• Contractual requirements;
• Project oversight and control;
• Provision of data for future work;
• Provision of events and timelines for review and analysis in the event of a dispute.

Thus, effective record keeping is vital to the business of any contractor or field service company. Now, after record-keeping follows the issue of file retention. You have all these hardcopy reports, receipts, bills, pay stubs, and so on. If you have been in business for some time, you will certainly have stacks upon stacks of these. You may be one of the many businesses that keep all of this documentation for fear of the IRS. Or you want to have those records in case you find yourself working on future projects for the same clients years later.

However, your tax board does not require every single one of those files that you have stored up in your office. And there certainly are better ways to keep records of projects completed for past clients than overcrowding your office with files and papers.

So first, let’s answer the most important question here. 

How Long Should You Keep Your Physical Project Files?

Let’s begin by considering the documents that the IRS does look at during its audits and how long you should retain these.

• Bank Statements: should be kept for at least 3 years.
• Employment Tax Records: should be kept for at least 4 years.
• Expired Insurance Policies: should be kept for at least 3 years.
• Income Tax Payment Checks: should be kept for at least 3 years.
• Income Tax Returns: should be kept for at least 3 years.
• Investment Trade Confirmations: should be kept for at least 3 years.
• Medical Bills (if tax-related): should be kept for at least 3 years.
• Mortgages/Deeds/Leases: should be kept for at least 3 years after being sold.
• Other Tax-Related Bills: should be kept for at least 3 years.
• Sales Receipts (Tax Items): a copy should be kept for at least 3 years.
• Stock and Bond Records: should be kept for at least 3 years.
• Supporting Documents For Tax Returns: should be kept for at least 3 years.
• Worthless Securities/Bad Debt: should be kept for at least 7 Years.

As for other categories of documentation, here are their safe retention periods:

• Accident Reports and Claims: these vary, but should generally be kept for up to 7 years
• Car Records (Maintenance, Recalls, Title): should be kept until the car is sold.
• CPA Audit Reports: should be kept for at least 7 years.
• Credit Card Receipts: should be kept until reconciled.
• Credit Card Statements: only require online storage.
• Current Insurance Policy: should be kept for the life of the policy, plus 1 year.
• Important Correspondence: these vary, but should generally be kept for life.
• Legal Records: consult with your lawyer on this, but legal records should generally be kept for life.
• Medical Bills (in case of insurance disputes): should be kept for at least 1 year after resolution
• Pay Stubs – End of Year (with accrual shown): should be kept until verified with W-2.
• Pay Stub – regular (with accrual shown): only keep those from the last 2 months.
• Pay Stubs – handwritten/no accrual shown: should be kept until verified with W-2.
• Property Records/Improvement Receipts: should be kept for at least 5 years after the property is sold.
• Quarterly 401k, Investment Statements: should be kept until year-end reconciliation.
• Retirement and Pension Records: only keep those from the last 3 years
• Sales Receipts (Big Ticket Items): file these away with the warranties of the items.
• Sales Receipts, Paid Bills: should be kept until reconciled.
• Utility Records: only require online storage.
• Wage Garnishments: should be kept for at least 7 years.
• Warranties and Instructions: should be kept for the life of the product.

6 Tips to Help You Clear the Clutter

Running out of office space? Here are 6 tips to enable you effectively manage your files and clear the cutter. These tips also apply to the messages in your email inbox. Feel free to apply the following tips and customize them to fit your business.

Keep only essential documents

You do not need to save every document or paper that finds its way into your office. Assess your file storage and only keep those that are relevant to your work activity, or required by your business.

You can also keep your files labeled with a “dispose of” date (use the retention duration list above as a guide), and implement a time-tracking tool to alert you when it is time for a certain group of files to go! This will effectively help you to keep the clutter out and make it easier to find things in the future.

Have a system for naming and labeling your files and folders

For instance, you can have different color codes or shortened names for files pertaining to different categories of people or types of projects (e.g. Clients – CLT, Suppliers – SPL, Workers – WRK, etc).

Store related documents together

Everything under a single project should be stored in a single folder, instead of spreading them out into different files for contracts, letters, spreadsheets, graphics, etc. This also makes documents easier to find.

Separate ongoing work from completed work

At periodic intervals (for instance, weekly or bi-weekly), move files you are no longer working on to the folders where your completed work is stored.

Organize documents by date

Make sure that the date of a document is clearly marked on it. You can highlight the date or include it in the title. Doing this will help you to organize your documents chronologically and also makes things easier to find in the future.

Make digital copies of paper documents

These days, most things can be stored electronically, eliminating the need for so much paper. This is exceedingly useful if, like one of the discussion starters on Contractor Talk, you are running out of office room. You get to archive documents without destroying them completely. Plus, technology like cloud storage makes the digital copies of your documents permanent, so you do not have to worry about them getting lost or destroyed by other unforeseen elements (e.g. a fire).

Making digital copies, however, will not be appropriate as replacements for all types of physical documents, for example, legal contracts or documents with original signatures. So be sure to keep such paper documents handy.