- Bank statements & reconciliations
- Contribution records
- Accounts payable records
- Payroll detail
- And other financial detail records
- Commercial insurance records and payments (property and workers' comp)
- W-2s, W-3s, 1099s, and 1096s
- General Ledger detail
- Monthly financial statements
- And other big picture records
The short-term docs are kept mostly in case of a church or staff member being audited by the IRS; IRS audits can go back only 7 years maximum. Also, after 7 years, most financial info is considered "historical" and not relevant to the church's current status.
The reason for keeping insurance docs forever is for legal purposes: if something comes up years later (child molestation or a building issue), you want to get the insurance company at the time of the incident to pay for and handle all the legal issues You need to keep a copy of the policy and payment of the bill to prove it was in effect. Other long-term docs are kept for legal and financial history; they are rarely consulted but it is a good way to keep financial history. There is no legal or financial reason to keep records of individual gifts beyond 7 years.
BTW, there is no permanent or long-term accepted standard for record-keeping. Right now the best way is on paper with an electronic backup in PDF format. Everyone is waiting on the Library of Congress to determine the definitive long-term storage but LoC is waiting on technology (which changes constantly). Until then, print things out (old-school) and have an electronic version (new school).
These docs need to be stored
- In a climate controlled environment such as a closet
- Above floor level so that rising water won't damage them
- Behind a secure door which is keyed differently than all other building keys
- In boxes on shelves to make access in subsequent years easier
- Together by fiscal year and all permanent records need to be stored together
- And, the financial records storage closet can also be used to store items that just don't fit in the finance office.
Shredding will cost less than $100 or you can see if your bank will shred your docs for you. Some businesses have "shredding parties" to draw new customers - take advantage of that even if you don't become one of their customers.