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| | The **The Business Consortium** Network is not currently active and cannot accept new posts | | Organization Tuesday: What Papers Do You Really Need To Keep? | Views: 400 | | Oct 07, 2008 8:20 pm | | Organization Tuesday: What Papers Do You Really Need To Keep? | # | 
Julie Bestry | | What papers do we REALLY
need to keep and what can we throw away?
Another
great question submission, especially because it has concrete answers.
You've heard me say that clutter is
decision making
deferred. We're surrounded by clutter because we
have some
obstacle to making up our minds regarding what should be kept and what
should be tossed (i.e., shredded, auctioned, donated, recycled, etc.).
With the non-paper items in our lives, we tend to keep things
we don't need or want because we don't have rules to
govern what should be kept. Instead, we tend to go with our
guts instead of our brains. We keep things because
someone gave them to us,
so we feel an obligation to the gift-giver...that turns into an
obligation to the item. Happily, almost nobody says "I have
to
keep this
empty, torn envelope because Bank of America sent it to me" the way
they think "I
have to keep this itchy, ugly sweater because it was a gift from Aunt
Gertrude seven years ago."
Or we keep things
because we spent a lot of money
for them, as if the dollar value of an unused item weighs
more heavily
than the inherent value of not having the space or the time to maintain
it. Aside from stock or gift certificates, we don't spend
money to buy paper documents, so this problem is eliminated.
Or we keep things
because we believe we have a sentimental attachment.
Notice, I said we believe,
rather than that we actually have
a sentimental attachment. If something is in good condition
and
displayed for maximum pleasure (and not broken and piled under layers
of clutter and dust in a "junk room") and we take the opportunity to
gain joy from it, we probably do
have a sentimental attachment.
If the only time we see an item is when we are digging
through
piles to find something
else,
having a moment of recognition and memory doesn't mean we're
emotionally or sentimentally attached. Memory does not equal
emotion; I remember middle school, but I'm definitely not
sentimentally attached to it.
For our personal and
family papers, it's pretty easy
for us to determine what we should keep and what we should throw away
because professional organizers, tax preparers and attorneys generally
agree on the rules for everyone. For business, however,
paperwork and documentation requirements are complex and can vary
according to industry and
state. For example, HIPAA regulations
and the Sarbanes-Oxley
Act
specify what and how medical and financial records, respectively, must
be maintained by Federal law, but there are varying (and
sometimes, conflicting) state and federal
regulations regarding what employment records must be kept and for how
long, and individual industries will have their own record-keeping
mandates for various issues.
Many professions require continuing education,
but the level of recordkeeping detail required, even among similar
professions within the same field, may differ.
Also, the recordkeeping of
a governing body tracking those continuing education credits may
obviate the need to keep backup paperwork on your own. My
doctor/dentist
clients only need to keep their certificates of continuing education
credit as back-up proof: the AMA and ADA do a good job of
keeping
contemporaneous records. Conversely, as a Certified
Professional
Organizer, I must not only record my credits with the BCPO governing
body, but I must also maintain registration documentation, certificates
of attendance and notes/handouts from the class. (The irony
that
a professional organizing body requires keeping so much paper clutter
is not
lost on me!)
Thus, for your business, consult with your
attorney and/or the governing principles set out by the highest
authority in your profession to get started in developing a records
retention schedule for your company.
So...when setting a personal or family records retention schedule, base your guidelines upon the
main reason the item might be retrieved.
Three mains reasons to keep papers are: proof, reference or sentiment.
Proof
includes legal and/or financial documentation which keeps you out of
trouble with the IRS or the police. This kind of
proof also protects your
interests in
cases of civil litigation. Such issues include identification
papers, tax returns and supporting material, insurance policies,
records of sale of property, etc.
- Identification
papers include
certificates of birth, death, marriage, divorce, adoption and
separation from military services, as well as passports and Social
Security cards. Not only should these be kept forever for
legal and financial proof purposes, but many are useful tools for
genealogical review as well.
- Tax
returns (state and federal) must be kept forever, and
though experts often advise that you can toss the supporting
material (i.e., receipts and notes) after seven years, properly
organized tax files shouldn't take up much space, and a bankers box or
two should hold a lifetime of not-very-complicated returns.
- Insurance
policy paperwork should be kept as long as the policy is
active. If you have unresolved
issues regarding insurance coverage,
however, you'll want to keep cancelled policies until the issues are
finally resolved.
- Records
of sale of properties and associated appraisals should be
maintained with the tax year in which the property was sold.
A side note about
receipts:
I like to mention receipts with regard to proof, because the only
reason you'll need to keep a receipt long term
is to prove something to
someone: prove you bought
it (in case ownership is in question or to prove you deserve the
deduction) or prove you bought
it (rather than copied/stole it and deserve the technical support).
Generally,
with regard to receipts unnecessary for proof, save receipts only until you are
able to
reconcile the amounts against your checking or credit card
account statements.
Receipts should usually only be maintained beyond the month of purchase
if the purchases has tax
implications (for home improvement, medical or
child care, or business expenses), if it is for a big-ticket item
or if
the item is likely
to be returned by the purchaser (or recipient, if
the item is a gift) by the return deadline. Most other
receipts can be shredded once the
checking or credit card statement verifies the accuracy of the amount
debited.
Reference
items include those papers which will help maintain or improve your
quality of life. Examples include family medical records
and professional/educational history and records. Although
this
would also include materials related to personal interests (financial
or travel research, continuing education, personal goals, etc.), a
records retention
schedule concentrates on time-specific retention for
financial, legal or
medical purposes. Items kept for personal
interest reference should be maintained as long as they are useful and
not otherwise easily accessed by other means, like quick Internet
searches.
Oh,
and trust me—if you aren’t a financial analyst, toss the stock and
mutual fund annual and quarterly reports! You won't
understand them,
and moreover, you won't actually ever read them. You do,
however,
need the papers specific to your account (i.e., with your investment
account numbers) because your tax
basis, calculated once you sell something,
will be based upon what you originally paid. If you get
end-of-year financial statements that incorporate all of the financial
transaction data on individual monthly/quarterly statements, you're
safe with only the end-of-year documents, but you do need to be certain
it's all-inclusive.
Sentimental
items are rarely maintained according to a records retention
schedule. Some families enjoy the tradition of keeping all
Christmas cards forever; others discard holiday cards on
January
2nd. As a professional organizer, I suggest that storage
space
and levels of true emotional attachment should be the guiding concerns
in maintaining items lacking inherent value for proof or reference.
I can't make you toss out that Hallmark card that's merely
signed
with an initial, but I encourage you to evaluate how much sentimental
value there is to be had in a piece of paper written by an employee of
a greeting card conglomerate. It's like someone heard a line
in a
movie and said "hey, honey...what HE said!"
So, the answer
to what you should keep and what you should toss depends on why you
might need it: proof, reference or sentimental desire. The
answer
to HOW LONG you should keep a piece of paper depends on those issues as
well as the utility of the specific item. For a tiny fee, I
sell
a small special report reviewing records retention in detail;
you
can also Google "document retention" or "records retention" to see what
other professional organizers, CPAs and attorneys recommend.
On
my blog, I've written in detail about the five types of family paper
and files you'll encounter (financial, legal, medical, household and
personal), so rather than reinvent the wheel (or create truly
HUGE Ryze
posts), I direct you to my blog series on family files.
- Filing
category overview
- Financial
paperwork
- Receipts
- Legal
documents
- Medical
records
- Household
papers
- Personal
papers
These
posts will give you sense of what papers to keep, but please, I welcome
the opportunity to help you on specific items. If
you don't
know what to do with an an April 2003 escrow summary or a receipt for
paid
library fines or an acceptance letter from the college you decided not
to
attend, let's talk about it. If you aren't sure whether or
where
you should keep the post-surgical instructions they gave you after last
year's surgery, or the proxy vote card from three shares of stock you
own, or the manual for your toaster, let's discuss it here.
PLEASE
share your loose paper issues, and I'll tell you whether you need to
keep them, where and for how long. Let me be your personal
records retention schedule robot! Talk! Share!
Ask!
--
Julie Bestry, Certified Professional Organizer®
Best Results Organizing
"Don't apologize. Organize!"
organize@juliebestry.com
Visit http://www.juliebestry.com to save time and money, reduce stress and increase your productivityPrivate Reply to Julie Bestry | | Oct 16, 2008 3:26 am | | re: Organization Tuesday: What Papers Do You Really Need To Keep? | # |
Julie Bestry | | Under the weather this week, so in lieu of an official post, I'm hoping to hear/see some chatter here about last week's info.
The question was What papers do we REALLY need to keep and what can we throw away? and my lengthy answer provided a framework, but ask your specifics. What are your paper/records retention questions?
--
Julie Bestry, Certified Professional Organizer®
Best Results Organizing
"Don't apologize. Organize!"
organize@juliebestry.com
Visit http://www.juliebestry.com to save time and money, reduce stress and increase your productivity Private Reply to Julie Bestry | | |
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