Accounting record keeping policies and procedures

3. Record keeping procedures in accounting

Record keeping procedures can include the following:

  • Indexing
  • Identifying
  • Storing
  • Retrieving
  • Transporting
  • Destroying

Indexing procedures: indexing files, boxes, etc. For example, each box can be indexed by the year of document destruction (e.g., 20X3 – box 5).

Identification procedures: labeling boxing, storing similar boxes in a common area, etc.

Storage area layout procedures: there should be a layout plan for the storage area to help with indexing and identifying boxes.

Document retrieval procedures: to ensure organized record keeping, there should be a procedure identifying the document retrieval process. For instance, document retrieval can be done through request forms, logout forms, reports listing all withdrawn documents, etc.

Storage and retrieval of confidential documents: confidential documents (e.g., legal, payroll) can be stored in a different area or off-site. Access procedures should be specified.

Transporting procedures: if needed, there should be procedures for transferring documents to off-site storage at the end of the fiscal year. That is, such procedures should specify the segregation and review of current documents at the end of the period (e.g., formal sign-off on the content of the transferred documents).

Document destruction procedures: these procedures require good controls to prevent improper destruction of the records. Such procedures should require: document destruction certificate (i.e., it should list documents to be destroyed -- in accordance with the company’s retention and destruction policy), approval signatures, and signature(s) of individual(s) who saw the actual destruction of the documents.

Important to note, record keeping policies and procedures apply to tax records as well. For example, it is important to retain tax returns as well as tax working papers (i.e., records created during the completion of tax forms). If possible, there should be a central tax database and tax calendar. The tax calendar might specify dates for estimated payments during the calendar year, year-end tax return, mailing tax return, retirement packages to be completed, forms, federal use tax (e.g., highway vehicles), etc.  Tax forms should have summary tables: storage location, form name/number, form due date, reporting location, reporting address, form sources, general ledge source (account), etc.

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