What are Financial Records?
Financial records are official documents maintained to represent an individual, business or organisation’s monetary dealings. Retained specifically for tax purposes, the record involves income earned and, money spent around the year.

What can you include in Financial Records?
Exhaustive and detailed, financial records involve every transaction you will undertake, in cash as well as electronic format. This includes, but is not limited to:
• Income statements
• Pay-check details
• Bills accrued
• Deductible expenses
• Insurance taken
• Investments made
• Interest and dividend earned
• Donations made
• Cash receipts
• Expense receipts
• Credit card statements
• Record of gifts, tips, and bonuses

Do Financial Records Expire?
Some people like to keep the financial records for an indefinite time period, just in case. However, based on the nature of the financial document, each record has an expiry date and a statute of limitations.
There are guidelines you can go through to understand the validity of financial records. Well-organised document retention helps retain the necessary paperwork, de-cluttering the rest.

What needs to be retained vs what can be shredded?
• Tax Documents
Tax records need to be retained for seven years. In the case of suspected misreporting, the Tax Service System can contest the returns filed within a six-year window frame. A seven-year time-period covers any eventuality, helping you reconstruct the details. Tax returns, deductibles claimed, mortgage & alimony payments, contributions to charity, donations, investment in retirement plans, cancelled cheques and interests statements form a part of Tax Documents.

• Property Records
Property Documents include records of purchase and sale of the property, legal fees, commission paid, expenses incurred on home improvements and other remodelling costs. These documents should be retained for a seven-year time frame from the time of buying or selling a property.

• Bank Documents
Nearly all banks offer an online service, making retaining bank records a redundant process. One can access any of the documents from a financial statement to credit card statement for about 5 years. One can, however, keep the records as per their convenience.

• Mortgage and Loan Documents
Paperwork related to mortgages, auto loans, student loans and other forms of loans should be kept until after they are paid off.

• Brokerage Statements
These include records of purchase and sale of securities and investments. Brokerage firms keep an account of these statements. However, it is ideal to keep a back up of these documents to match up the annual summary. If at all, the statements are part of the tax return claims, then it should be saved for the seven years window.

• Insurance
Papers pertaining to insurance policies should be retained until maturity or until utilised.

• Bills
Bills related to small, day-to-day expenses can be retained until the payment is made. However, bills related to big-ticket and insured items should be held until you have the item. Expensive items such as jewellery, furniture or electronics come under this stipulation. Having them handy can help you verify the purchase in case there is a need to claim an insurance or in the event of loss or damage of the item.

How far can you go?
Financial record keeping can seem to be a painstakingly detailed process. Sorting out electronically or in a paper format, an organised financial system is going to be an important step forward in managing the data trail.