How Long Should You Store Your Documents?
Implementing a secure virtual data room for your due diligence during complex deals is an arduous process, but an even more exhaustive question is: how long should you store your documents? Just because your deal has closed doesn’t mean your data room should, which is why it’s important to consider all the factors with regards to your clients and business before you pull your documents from cloud-based storage. Depending on the type of documents, below are a few ways to determine how long you should keep them stored and when it’s time to let them go.
- Anything pertaining to your business, such as audit reports, patents, registration forms, tax documents and legal records should be kept for as long as your business is running
- Documents that signify correspondence with customers and vendors or copies of other pertinent documents, such as purchase orders, have a shorter shelf life and so only need to be stored for about a year
- Anything that involves your employees after their termination or internal reporting and correspondence should be stored for at least three years
- Documents regarding bank statement and accounts payable should be stored for at least seven years for good measure, even expired contracts are vital for reference in later years
All in all, not all documents are as important as others, but it couldn’t hurt to store them for as long as necessary in order to ensure that you are able to refer back to them efficiently in the future. Whether you are in the middle of an M&A and require your virtual data room to store all pertinent information for your deal or simply need a platform to maintain records of your company throughout its life, it’s better to be safe than sorry and recognize the importance of each document before you decide to no longer hold on to it.
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