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How long should I keep paper receipts?

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Question:

We have a POS system in place. I’m not sure how long we should keep the merchant copy sales receipts. Do you know if there is a rule of thumb for the hard-copy receipts?

 

– Elizabeth Pietoso, Secretary, Luca Enterprises, Saint Charles, Mo.

Answer:

In our electronic age, it seems bizarre to have stacks of paper piled up. But, for the most part, it’s a case of “better safe than sorry.” Fred Kaplan, director at Mazars USA LLP, an accounting firm with a number of food industry and hospitality clients, advises, “The rule of thumb is to retain receipts for as many years as you could be audited by a tax authority. While the IRS would generally look back three years, the state may require a longer retention period for sales and sales tax records. Even though the POS system stores this information, the paper receipts are a backup record.”

A few other reminders:

  • While your POS system should not print personal data such as credit card numbers on receipts, be sure to keep files locked and secure to protect guest privacy as well as the details of your business.
  • When using electronic records such as scanned receipts or relying on your POS, always have reliable and secure backup.
  • Keep receipts clearly organized by date—even an envelope for each day of operation. In the event of a dispute or audit, the time saved in looking will be worth it.
  • When you dispose of receipts, follow privacy guidelines to shred them or have them incinerated.

Finally, remember that stacks of paper are not kitchen-friendly. If possible, use an off-site office, or at least one out of a food preparation area. Restaurant consultant Harris Eckstut reminded me that the fire marshal takes issue with stacks of paper—they can also harbor vermin and be challenging for cleaning.

More on storing hard-copy receipts here.
 

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