What Records Is a Small Business Required to Keep?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

Keep the records that prove your income and expenses, your employees’ pay and paperwork, your safety incidents, and what you promised in contracts and insurance policies. The Internal Revenue Service (IRS) says your records must clearly show income and expenses and prove every deduction you take. Make one list of each record type, why you keep it, who owns it, and where it lives.

What this means

A required record is one a law, an agency, a contract, or an insurance policy says you must keep. Here are the main groups.

Tax records. The IRS lists supporting documents by type:

Gross receipts: deposit records, invoices, receipt books, and Forms 1099 you receive
Purchases and expenses: proof of payment, receipts, account and credit card statements, and invoices
Assets: purchase and sale invoices, closing statements, and payment records
Employment taxes: payroll records (see 10.3.4 Payroll Tax Deposits)

Employee records. If you hire, the Department of Labor (DOL) requires pay and hours records under the Fair Labor Standards Act (FLSA). U.S. Citizenship and Immigration Services (USCIS) requires a Form I-9 for each new hire. The Equal Employment Opportunity Commission (EEOC) requires covered employers to keep personnel records such as applications and hiring decisions.

Safety records. The Occupational Safety and Health Administration (OSHA) requires many employers to keep injury and illness logs. OSHA says employers with 10 or fewer employees during the whole prior year are partly exempt from the routine logs, and some low-hazard industries are too. That doesn’t remove every safety duty.

Business records. Formation papers, ownership records, licenses and permits, and minutes or written consents (see 8.7.1 Formation Documents).

Contract and insurance records. Signed customer agreements, vendor contracts, and your policies. Many contracts and policies require you to keep records and hand them over on request.

Industry records. Some trades have their own rules. A contractor may need permit and inspection records. A food business may need temperature logs. Your licensing board sets these.

Made-up example: Pine Ridge Lawn Care has two seasonal workers. Its list includes bank statements, receipts, invoices, payroll and time records, I-9 forms, the state contractor license, the general liability policy, and signed service agreements. Each line names who keeps it and the folder it lives in.

Why it matters

Audits. Without receipts, the IRS can disallow deductions.
Wage claims. If a worker says they weren’t paid right, your time and pay records are your proof.
Inspections and fines. Missing I-9 forms or OSHA logs can bring penalties.
Insurance claims. Insurers may deny or delay a claim if you can’t prove what happened.
Profile problems. If Google asks for proof of your business, you need your license, registration, or lease on hand.

Who this applies to

Every business keeps tax and business records. Employee, I-9, and payroll records apply once you hire. OSHA logs apply to many employers with more than 10 workers. Industry rules apply to licensed trades and regulated products. Rules also vary by state, so check with your state labor department, state tax department, and licensing board.

How to do it

Start a records list. Use a spreadsheet with columns for record type, why it’s required, who owns it, where it’s stored, and how long to keep it (see 9.8.2 Record Retention Periods).
Add tax records. Use the IRS categories above.
Add employee records if you have or plan to have staff.
Add safety records. Check OSHA’s rules for your size and industry.
Add business records. Formation, ownership, licenses, permits, and leases.
Read your contracts and policies. Look for clauses about keeping records, audits, or reporting.
Check your industry. Ask your licensing board or trade group what it requires.
Check your state. Many states add their own payroll, tax, and licensing record rules.
Assign an owner for each record type.
Pick a storage spot for each (see 9.8.3 Record Storage and Access).

The IRS says electronic records must meet the same rules as paper ones. Scanning is fine if the copy is clear and complete.

What proof to keep

The records list itself, with the date it was last updated
Notes on which agency or contract created each requirement
Your professional’s sign-off on the list, if you had it reviewed

Store the list in your Master Business Record folder (see 5 Master Business Record).

Common mistakes

Keeping bank statements but not receipts. A statement shows you paid. A receipt shows what you bought.
No I-9 for family members or part-timers. If they’re employees, they need one.
Forgetting contract clauses. Some customer and vendor contracts require you to keep job records for years.
Treating the email inbox as storage. Important records get lost or deleted.
Making the list once and never updating it. Hiring, a new license, or a new contract changes it.

When to get help from a pro

CPA or tax professional: for tax record needs. Attorney: for contract, employment, and industry rules. Questions to ask:

Which records do my state and industry require beyond the federal ones?
What do my contracts and insurance policies require me to keep?
Is my records list missing anything you’d want in an audit?

Bill’s note

[Bill: add a short lesson. For example, a time a missing record caused trouble for a client, or how proof of business documents helped get a suspended Google Business Profile reinstated.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: how I built the SiteSmarty records list and who owns each line]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: the SiteSmarty records list spreadsheet]
[Result so far:]

Questions people ask

What tax records should I keep? Records that show income and expenses and prove each deduction, such as invoices, receipts, statements, and proof of payment.

What employee records do I need? At minimum, pay and hours records, a Form I-9 for each hire, and payroll tax records. Your state may require more.

Do I need OSHA injury logs? Many employers do. OSHA says employers with 10 or fewer employees during the whole prior year are partly exempt from routine logs, as are some low-hazard industries.

Can I keep records digitally? Yes. The IRS says electronic records follow the same rules as paper. USCIS allows I-9 forms to be kept electronically.

How long do I keep them? It depends on the record. See 9.8.2 Record Retention Periods.

Audit check

Question: Does the business have a written list of every record it must keep, with an owner and a storage location for each?
Pass looks like: A current list covering tax, employee, safety, business, contract, insurance, and industry records. Each line has an owner and a location.
Fail looks like: No list. Records scattered across inboxes and desk drawers. Employee or safety records missing.
Evidence to collect: The records list, a sample of records from each category, and the date the list was last reviewed.

Where this fits

Do this first: 9.3 Requirement Matrix, 9.7.5 Accessibility Complaints

Do this next: 9.8.2 Record Retention Periods

Sources

IRS, "What kind of records should I keep" (checked October 17, 2026)
IRS, Publication 583, "Starting a Business and Keeping Records" (checked October 17, 2026)
DOL Wage and Hour Division, Fact Sheet 21, "Recordkeeping Requirements under the FLSA" (checked October 17, 2026)
USCIS, "Retaining Form I-9" (checked October 17, 2026)
EEOC, "Recordkeeping Requirements" (checked October 17, 2026)
OSHA, 29 CFR 1904.1, "Partial exemption for employers with 10 or fewer employees" (checked October 17, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.