Retention of financial documents

Recommended Guidelines

What is a document?

Documents do not have to be in physical paper form, although there will inevitably be paper documents. A document can also be an electronic document. For example, paper bank statements may not be received and a PDF bank statement could be downloaded; and suppliers are increasingly sending their invoices out in PDF, or other electronic, format. Such alternatives would still be considered to be documents. A document can also be a web page, an electronic file or a spreadsheet. Automation has meant that documents are wider in scope than information contained on pieces of A4 paper.  Whatever form the document is in, it may well be subject to legislation that dictates how long it needs to be retained.

Retention periods

In determining appropriate retention periods departments need to consider the following:

• legal and related requirements
• potential demand within the organisation
• historical value
• cost of storage

The guidance below is not intended to be a comprehensive list of all the financial documents held in a department and does not imply that all other documentation can be destroyed. Further information and examples are detailed in the Statement of Records Management Practice and Master Records Retention Scheduleissued by the Information Compliance Office.

Format

Documents can be retained either as hard copies or electronically, HMRC* specify that they need to be:

• accurate and up to date
• legible
  
• readily accessible
• available for inspection at all reasonable times by HMRC, auditors etc.

Where held electronically there should also be an adequate back up and disaster recovery system. Therefore, if the document was generated in UFS (e.g. a purchase order) all of these criteria are met and there is no need to print it out solely for the purposes of document retention: likewise, for purchase invoices received by the University for eInvoicing.

Scanning documents

Resolution of at least 300dpi (dots per inch) is recommended when scanning documents. This resolution is a good balance between readability and file size. A significantly higher resolution is not usually required and would result in unnecessarily large file sizes. Standard font size 10-point and up are readable at 300dpi. This is essential where a document is to be kept as a digital copy for reference purposes, and good practice for other documents. The auditors may wish to see original documentation - where a document has been scanned and the original paper document since destroyed, then the scanned document (stored in a way where it can be retrieved and vouched for as a true copy of the original) is deemed to be original source document.

Further information on specific document types is given below:

Purchase Invoices
Sales
VAT returns
Outside grants
Banking
Payments to staff
Fixed Assets Register
UFS/payroll information
Credit/debit card receipts

All original paid invoices should be retained by departments for seven years (six years plus the current year). Any photocopies of invoices are only for reference purposes and can be disposed of as appropriate. Purchase invoices received in UFS via the University’s eInvoicing system do not need to be printed out for documentation retention purposes. Supporting requisitions, purchase orders and goods received notes should be kept for three years or, in the case of research grant contracts for the duration of the award if longer. (If desired hard copies of requisitions and purchase orders raised on UFS do not need to be kept as these can be retrieved electronically if required.

Sales

Copies of all sales VAT documents, which include sales invoices and daily till rolls from shops, must be held for seven years, i.e. six years plus the current year. If a department has particular difficulty in keeping six years of till rolls, it is possible to apply to HM Revenue & Customs, via the Taxation Section of the Finance Division, to request a shorter period of retention. Also, departments do not need to keep hard copies locally of sales invoices and credit notes raised on UFS as these can be retrieved electronically if required. Although backup documentation as to why the invoice was raised and how it was calculated should be available for the retention period..

VAT Returns

The Finance Division keeps copies of all VAT returns including the Intrastat and EC returns. However, as only the actual returns are held by the Finance Division, all supporting documentation used to compile the return, including invoices, must be retained by departments for a period of seven years, i.e. six years plus the current year.

Outside Grants

The University’s Research Operations Office (ROO) holds the original contracts/agreements, related correspondence and financial documents for at least six years after expiry of the grant. If a department holds any further relevant original documentation then this should be held for a similar period. Any detailed records supporting charges against the grant, e.g. time sheets, should also be retained for a period of six years after the expiry of the grant. However, any specific terms within a particular contract relating to the retention of records will take precedence. If in doubt consult ROO.

Banking

The Finance Division keeps copies of all receipt records and as the daily banking sheets are not prime documents supporting individual sales transactions there is no need to keep these sheets beyond three years. Bank paying-in counterfoils should be kept for six years.

Payments to Staff

All documents relating to payments to staff, including expenses, overtime forms and P11D declarations should be kept for at least seven years, i.e. six years plus the current year. Any supporting documentation held in the departments and not copied to the centre should be retained for a similar period.

Fixed Asset Register

Fixed Asset registers should be kept indefinitely. Copies of asset disposal notes should be kept for six years.

UFS/Payroll Information

The Finance Division retains copies of the general ledger (via UFS) and all payroll records for at least seven years.

Credit/Debit card receipts

Original retailer copies of transactions must be retained in a secure and accessible place for a minimum period of 18 months. Stored documents should be reviewed quarterly and securely destroyed/deleted if no longer required. The security requirements for card and customer data are mandatory and there is certain information that must NOT be stored at any time. For further details see Chapter 7, Cash & Banking.

*https://www.gov.uk/guidance/archiving-your-trade-documents  [accessed 23/10/19]