What Financial Documents Should Be Shredded

What Financial Documents Should Be Shredded?

Shredding important financial documents is a vital part of information security. Financial records contain sensitive information with the potential for exploitation if it should fall into the wrong hands, so it makes sense to destroy these documents after they have served their purpose. Still, knowing when to shred financial documents can be complicated. Which items should be kept, and for how long?

What is Financial Document Shredding?

Financial document shredding is the complete obliteration of financial documents, done in a secure manner that prevents unauthorized access to their information. A secure document shredding service can provide off-site shredding, transporting materials in secure containers to the shredding facility, or on-site shredding, in which the documents never leave your property. The important thing is that these documents are securely shredded, in a way that renders the critical information irretrievable.

Why Financial Documents Should Be Shredded

Whether you are an individual or a business, there are compelling reasons to shred financial documents. First, paper tends to pile up in homes and businesses, and eventually it becomes a drag on productivity and efficiency. Shredding eliminates paper clutter in a responsible way, recycling it and keeping it out of the landfill. What’s more, shredding financial records you no longer need is the most effective way to make sure that sensitive data is kept secure, with no breach of information.

Financial Documents to Shred Securely

So, which documents should you shred? In many businesses, a “Shred Everything” policy is in place, so that there are never any difficult decisions regarding what is or is not shredded. However, certain documents must be held for a particular length of time before they are shredded, particularly tax-related documents. Some documents, like birth certificates, marriage certificates, and proof of property or assets, you will want to keep. Here is a list of documents you should shred, and when you should shred them.

• Payroll documents: Anything that contains identifying information about your employees should be shredded. This includes copies of pay stubs, timesheets, records of benefits payments, and other employee data. In keeping with IRS regulations, however, payroll information should not be destroyed for four years.
• Tax records: Never get rid of tax records without shredding them, because tax records contain very sensitive information, which could be used for fraudulent purposes. However, it is best to wait seven years to destroy them, in case of an audit.
• Vendor invoices: Shredding these documents protects not only your organization but also theirs. You don’t want insider information that could disrupt your business to fall into the wrong hands.
• Budget information: Whether it’s departmental or company-wide, a budget should be shredded to prevent giving anyone access to information on how your business is run.
• Bank statements: A thief who gains access to an organization’s bank information could potentially set up pre-authorized debits and credits, billing your company for items that were not ordered or received. Like tax records, though, bank statements and other financial documents should be kept for seven years.
• Insurance records: Few documents have more identifying information than insurance records. Shred these, to keep your company safe from impersonators and scam artists.
• Canceled checks: The confirmation you receive when your business cancels a check includes your banking details, and if these details are accessed by a bad actor, they could be used to illegally access your accounts.
• Digital records: Storing your sensitive information digitally makes sense when you are trying to reduce paper clutter, but it is still important to safeguard the data. When records are transferred from one device or format or another, or hard drives need disposal, the hardware must be destroyed or thoroughly wiped.
• Credit card statements and offers: There is no need to retain credit card statements, because they can be accessed online. Credit card offers also contain sensitive information and should be shredded.
• Investment statements: Hold onto year-end investment statements until you receive the following year’s statement, then shred.

Shredding Your Business Financial Documents

As evident from the list above, it can be complicated to manage business records and determine when to shred them. As a rule of thumb, anything tax-related should be kept for seven years, then shredded. Assess your other documents and get on a schedule of retention and destruction, taking care to enlist the help of a professional document shredding company so that the work can be handled efficiently and securely.

What about investment-related documents – Shred or No Shred?

Trade confirmations and investment statements don’t need to be kept forever, but they should be retained for four to six years. However, your documents are likely available online, or you can request copies from your brokerage if you should need them. Hold onto IRA documentation to track tax-deductible and non-tax-deductible contributions, for tax purposes. If you are confused about your investment documents, talk to your financial advisor, a tax professional, or an attorney.

Trust Shred Time LLC for Document Shredding Services

For financial documents, secure shred service is a must. That’s why it pays to choose an industry leader with extensive experience to provide secure document shredding. Founded in 2010, Shred-Time Inc is a locally owned and operated information and data destruction company in Los Angeles, California. Our trustworthy and experienced team provides excellent customer service, 7 days a week, for both residential and business clients. At Shred Time, we are committed to providing affordable services to all of our clients, regardless of the size of their business, and we operate with the utmost integrity. Our services include walk-in or pick-up shredding services, and shredding done onsite, at your location, to avoid compromising security. We also offer x-ray film destruction and recycling, garment destruction, and hard drive destruction services, and we provide our clients with secure containers at no cost, so that materials can be transported securely to our shredding facility. Whether you need documents shredded or hard drives destroyed, we can ensure that your sensitive data does not fall into the wrong hands. Committed to providing our customers with an accessible, efficient, and secure form of information destruction, we are just as dedicated to compliance with state and federal laws. For more information on our services and how we can help you, contact us today.