Many small businesses still overlook basic security protocols, assuming they’re too small to attract cybercriminals. But that’s a costly mistake. Data compromises reached record levels in 2025, and identity theft and data breaches continue to rise—posing real risks to small businesses and their customers.
While much of the focus is on digital security, paper documents remain a common—and often overlooked—vulnerability. Payroll records, tax filings, customer information, and bank statements can all be exposed if not handled properly. And during tax season, when businesses are reviewing and clearing out old files, the risk only increases.
Keep or Shred?
Knowing what to keep—and what to securely dispose of—isn’t always straightforward. Requirements vary by industry and location, but the U.S. Chamber of Commerce offers general guidelines small businesses can follow.
Keep
- Federal tax returns and supporting documents—typically for seven years to accommodate IRS audits
- Employee payroll and benefit records—often for three to seven years, depending on regulations
- Contracts and legal agreements—retain for the life of the contract, plus several years after expiration
Shred
Once retention requirements have been met, these documents can be safely destroyed:
- Old bank statements and reconciliations—after three to seven years
- Outdated bills, invoices, and routine receipts
- Employee files for terminated staff—after required retention periods
Proper shredding not only helps businesses stay compliant—it also reduces clutter and minimizes the risk of sensitive information falling into the wrong hands.
Should You Shred Your Own Documents?
While it may seem convenient to handle shredding in-house, doing so can create new risks. Office shredders can jam or break, leaving sensitive information exposed. And even when documents are shredded, improperly destroyed materials can sometimes be reconstructed.
There’s also the question of time. Shredding documents internally can take employees away from more productive work.
For many small businesses, using a professional shredding service is a more secure and efficient option. Services like those offered by The UPS Store provide secure document destruction, helping reduce the risk of data exposure while freeing up valuable time.
Right now, through April 19, The UPS Store is offering shredding services at its more than 5,500 locations for a 25% discount.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+