Employee record keeping is one of those essential, if tedious, tasks. To comply with state and federal employment laws and to protect your company against potential lawsuits, business owners would do well to ensure that these records are secure and well organized. Under the guidance of their professional accountant, many small businesses maintain comprehensive employee files for a period of seven years. After seven years, it should be safe to dispose of these files. Some businesses, especially larger companies with big record keeping requirements, will maintain different files that can be destroyed as the records retention schedule allows. Regardless, as your company grows and matures, you’ll want to be sure to establish an annual document and archive review to determine what files, if any, should be discarded.
Employee Record Keeping Practices
That said, the method of employee record keeping can be just as important as the timeline. Employee files are required to be readily available to an IRS agent or other authorized query, but this doesn’t prohibit them from being stored digitally. You may be able to submit some of your records electronically, but so long as you can print them out in a timely manner, you should have no trouble complying with the applicable record keeping laws. Moreover, if you’re undergoing a typical audit process, you’ll likely have some warning about when to have these employee files and other relevant information ready for the agent.
User-Friendly Support from Beginning to End
You’re not going to be doing your business or household any favors by telling the IRS that you have the employee files on record, you’re just having trouble finding them. Nowadays, electronic employee record keeping is permissible in most every jurisdiction, but that doesn’t necessarily mean that you can submit them electronically to the relevant state or federal agency.
How do you know if your small business management software has what it takes to safely store your employer-based filing forms, while also being able to print archived form information at little more than a moment’s notice? It really starts from the beginning. If you’re about to import, input, and print out the form information you need without issue, that’s a pretty good sign. Indeed, it’s important to know that your prior year information database can be found and print out if you ever need it in the future.
Discover AMS Software
This isn’t a concern with Advanced Micro Solutions (AMS). Our 1099 & W2 Software platform provides the kind of menu-driven interface, secure data files, and versatile reporting features that ensure you always have access to your current and prior year filing information. Better yet, you can use our modular software solutions to create a custom package of features, and at a price that makes sense for your business. Take a look at our full catalogue of products and prices when building your own AMS system:
- W-2/1099 Forms Filer (required platform)
- Forms Filer Plus
- Payroll Software
- Software-Generated Forms
- E-File Direct
- Affordable Care Act Filer
- 1042-S Filer
We’ve offered excellence in W-2, 1099, and payroll support solutions for more than 30 years. Download our accounting software or talk to our Sales and Information team at (800) 536-1099 to discover what AMS can do for your payroll and employee record keeping.