Records retention: mini guide to keeping your records digitally

Keeping your records is not a choice, but a must. This is because it is a legal requirement to record all data about your business. You must also be able to retrieve them over a certain period of time, for example in the event of an audit by the tax authorities. But the details regarding the legal retention obligation are not clear to everyone. That’s why you Googled the term “legal records retention period. How long must you store your records? How can you keep records? And how do you keep your records in order? In this mini guide to keeping your accounts digitally, you’ll find the answers to these questions!

Wages, accounts payable, real estate and more: keep your records from a to z

The tax retention requirement applies to every business. This means that you must keep things like accounts receivable and payable, purchase and sales records, inventory records, payroll records and general ledger for at least seven years. In addition, you must keep all records of real estate for ten years. In short, your business records must be in order. This means you want to keep an overview. The easiest way to do that is to do it digitally. But is that allowed? Or should you keep everything on paper?

Storing invoices and other documents digitally: is it allowed?

Do you still keep your invoices and other records on paper? If so, you’re probably dealing with bulging filing cabinets. And the “big clean” takes more time every year. But maybe you take these things for granted because you think there’s no other way. Fortunately, that’s not true. In fact, if you meet certain conditions (everything must remain available, for example), you may indeed keep digital records. Of course, it takes some research to determine what measures you must take to fully comply with the legal retention period. For example, you must keep every digital invoice and the communication about it for seven years (you can read more about this in this blog post). All documentation must have integrity and be easy to read. And – very important – you must keep your invoices digitally in accordance with the General Data Protection Regulation (AVG). (You can read more about the legal ins and outs regarding digital invoice storage in this download from the Tax Office ). Building a solid accounting foundation does pay off. Because when you digitize your accounts properly, you can retrieve all the important information immediately. Overflowing cabinets, lack of space and hours of searching are thus a thing of the past. So you work a lot faster and more efficiently!

How to make sure your digital records are rock solid? 5 tips

1. Keep your financial records properly

Digital administration starts with a well-organized (and therefore easily searchable) “virtual filing cabinet. Want to keep your records in your ERP system? Then make sure all the data is correct. If the IBAN, VAT and Chamber of Commerce numbers and other data are correctly entered in your accounting system, you can be sure that all information is properly recorded. Also check that the file of mail addresses is up-to-date, so that customers receive all communications.

2. Use a reliable automation solution

Smart OCR software forms the basis of orderly digital administration. You process incoming documents at lightning speed, reduce the number of manual operations to the absolute minimum and can easily store processed documents in a digital archive. This makes it easier to comply with legal retention requirements.

3. Make sure you keep all records in one place

It is important that you keep all processed incoming documents in one place in your ERP system. For example, if you want to retrieve a purchase invoice and all its notes four years later, you should be able to do so with a simple mouse click. In short, you want to keep everything manageable. Many ERP systems offer options for this, but often these are limited – especially when it comes to purchase invoice processing. After all, for the ERP vendor, this is a peripheral process. If you want to store invoices digitally, additional scanning and recognition software can make this a lot easier.

4. Make arrangements with suppliers regarding delivery of invoices

As long as you are still receiving paper invoices by mail, you cannot set up a paperless office or digital records. That’s why you need to make arrangements with suppliers. Ask them to always send invoices digitally in the correct format: pdf, XML or UBL (these are the only legally valid formats). Also indicate that invoices must contain correct data. Do you still receive an incomplete invoice? Then send it back asking the supplier to complete the document with the missing information.

5. Pay attention to a proper backup procedure

Your security is in great shape and you put a lot of effort into catching phishing emails and preventing fraud. Unfortunately, no system is foolproof. Software can always crash. That’s why it’s important that you keep all digital data safe. You do that by ensuring a solid backup procedure. Does this mean you have to take all kinds of measures yourself? You can do that, but it will cost you a lot of time and effort. It is often more efficient to use a cloud solution that takes care of all backups automatically.

Comply with tax retention requirements and set up solid digital records?

Want to comply with tax retention requirements, set up reliable digital records and get your accounting in order? Feel free to contact Whitevision. We would be happy to discuss your options.

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