In addition to the internal requirements your organization has for its record retention practices, you must also abide by all of the record retention requirements that the federal government has put in place. This article will discuss everything you need to know about the federal government's record retention requirements, including what they are and the best ways to keep your records in line with the requirements.
Types of records you must keep based on federal records retention requirements
Your tax filings are not the only records that the federal government requires you to keep. In addition to your taxes, be sure to keep the following on file:
- Accounting records
- Financial auditor reports
- Patent records
- Stock records
- Property records
- Purchase and payment receipts
- Relevant customer records
- Payroll documents
- Correspondences with the Canada Revenue Agency
- Cancelled checks
- Proof of licensure
- eCommerce records
- All other records that support your income
For a comprehensive, up to date list of documents that you must retain, visit the business records section of the Canada Revenue Agency's website here.
How long records must be kept based on federal records retention requirements
This varies greatly, depending upon the type of record you are looking at. Tax documents, for example, must be retained for at least six years. On the other hand, auditor's reports must be retained forever. If you are not sure how long a particular document should be retained, assume that you must retain it indefinitely until you can verify with the federal government.
Where you must keep records based on federal records retention requirements
According to the Canada Revenue Agency, all of your records must be kept at your place of business. If you would like to maintain your records outside of Canada, you must obtain written permission from the federal government.
Some records are also required to be destroyed
The federal government requires you to destroy certain records that contain personally identifiable information (assuming that you no longer need it). If, for example, you obtained a customer's social insurance number for the sole purpose of checking their credit, you must destroy your record of this information after the credit check is complete.
Keeping up with federal records retention requirements
Now that you know the rules, you should understand the best way to follow them, because federal government records retention requirements will require you to retain a lot of documents in many different ways. That being said, here is how to streamline your records management system:
Convert your current and future documents to digital files
Keeping all of the records that the federal government requires you to retain on-site in paper form is a difficult – if not impossible – task. Your office space is limited and your employees should not be forced to navigate around paper clutter every day. That is why it is imperative that you have all of your documents converted to digital files.
Use modern software to manage your digital files
Even once you get your documents off of your desk and into your computer network, it can still be difficult to manage them in accordance with federal requirements. That is where document management software will come in. This type of software can automatically make your files indexed, secure and searchable. This makes accessing, protecting and destroying files on demand much easier.
Are you prepared to follow federal records retention requirements?
Do not wait until it is too late to comply with the government's records retention requirements. Use the information provided in this article to help you get on the path towards efficient records management that keeps your organization in line with the law.
