How long should you retain your records?

Who wants to waste space storing old records or pay a storage facility?  If not properly stored you won't be able to find what you're looking for anyway when you need it.  Of course with computers you can scan all of your papers and storage becomes less of a problem, though scanning will be costly in terms of time and personnel.  So lets look at a few issues on this topic.

    First financial documents.  IRS recommends seven years.  A long time, but you could be in an audit and a request made for certain back up documents.  Best to ask your accountant what papers you need to keep and how long you need to store them.  You might be able to get bank and credit card records replicated, but there may be a high cost.  Find out how long your bank and credit card companies retain that information.

    Subscriber records:   Here you can safely rely upon statute of limitations.  Your main concern is getting sued.  Once your subscriber contract and file has made its way to storage you obviously have no need for it.  You only need to be concerned that your subscriber or someone else suddenly has an interest in the contract and file.  You should have some notice of that possibility because you will be aware of most situations where you might get sued. If you are aware of an alarm failure or even a loss where you have an alarm, you should treat it as a potential lawsuit and create and store the file.  You will need contracts, service records, investigative reports, central station records - which you may have to obtain from your central station if you sub that out.

    In New York the statute of limitations for negligence is 3 years and contract 6 years.  Check your state for your statutes.   If you know of a loss you would be wise to create a file and then retain the records for at least 6 years.

    There is a possibility that you could be brought into a lawsuit after the statute of limitations, either as a main defendant or as a third party defendant.  It would not be unreasonable however for you to be unable to produce your records after 6 years.

    My standard contracts, by the way, have a provision that requires lawsuits to be brought against you within one year.  Shortening the statute of limitations is enforceable as long as the time isn't unreasonable.