Paperwork and Record-Keeping

1. 1

   The individual(s) completing and maintaining paperwork and records in a small business is dependent on the subject matter of the paperwork and the size of the firm. Owners most frequently handle paperwork and record-keeping related to licenses and permits (55% of firms), purchases (46%), and clients/customers (46%). They least frequently deal with financial (27%) and tax (12%) records. Three of four have someone (another firm) outside handle their tax paperwork. Paid employees customarily do most of the paperwork and record-keeping in about 25 - 30 percent of firms. Employees are much more likely to do so in larger, small businesses than in the smallest ones regardless of subject matter (except tax). Unpaid family members do the paperwork in less than 10 percent of cases.

2. 2

   The cost of paperwork also varies by subject matter and firm size. The more paperwork and record-keeping that must be sent outside, the more expensive paperwork and record-keeping becomes. Owners of larger, small firms pay higher average prices per hour because they are more likely to send their paperwork to outside professionals and because the value of their time on average is higher.

3. 3

   The estimated average per hour cost of paperwork and record-keeping for small businesses is $48.72. By subject matter the average per hour cost is: $74.24 for tax-related, $62.16 for financial, $47.96 for licenses and permits, $43.50 for government information requests, $42.95 for customers/clients, $40.75 for personnel, $39.27 for purchases, and $36.20 for maintenance (buildings, machines, or vehicles).

4. 4

   The typical small business employs a blend of electronic and paper record-keeping. Less than 10 percent use paper exclusively and a handful use only electronic means. The type of record most frequently completed and maintained on paper is licenses and permits.

5. 5

   Increased computerization helps small-business owners cope with their paperwork and record-keeping responsibilities. Ninety-two (92) percent of small-business owners use one or more computers in their business. Fifty-eight (58) percent of users employ the Internet regularly for business purposes, and 57 percent of regular users have a high-speed connection.

6. 6

   About half hold all types of records seven years or more, but two-thirds to three-quarters hold financial and tax records that long.

7. 7

   Applicable records are typically destroyed in a manner that protects the privacy of individuals. However, between 15 to 20 percent of owners trash paper records (in contrast to shredding or burning them) and about one in four simply delete electronic records. Owners treat personally sensitive records in virtually the same manner that they treat those sensitive to others.

8. 8

   No single difficulty creates the government paperwork problem. The most frequently cited problem is unclear and/or confusing instructions (29%). The second most frequently cited difficulty is the volume of paperwork (24%). Duplicate information requests (11%) place third, followed by maintenance of records that ordinarily would not be kept (10%) and requests for inaccessible or non-existent information (9%). Twenty (20) percent could not decide.

Volume 3, Issue 5, 2003
ISSN 1534-8326

William J. Dennis, Jr.
NFIB Research Foundation

• 12What is the most difficult aspect of government paperwork for your business? Top 100
• 1Do you think the government should compensate you for dealing with the added paperwork and record-keeping it requires of your business?
• 1aWhat do you think would be a fair per hour amount to claim for your time and efforts?
• 1bIf the decision were made to reimburse you, what do you think would be a fair per hour amount to claim for your time and effort?
• 2Who does your business’s personnel paperwork and record-keeping? Is it:?
• 2aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 2bAre the business’s personnel records kept on paper, electronically, or both?
• 2cAfter an employee leaves, how long do you keep those records before getting rid of them?
• 2dTwo years after an employee leaves, how accessible are their records? Are they:?
• 2eHow do you dispose of personnel records that are on paper? Do you:?
• 2fHow do you dispose of electronic personnel records? Do you:?
• 2gDo you secure and limit access to personnel records?
• 3Who does your business’s financial paperwork and record-keeping? Is it:?
• 3aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 3bAre the business’s financial records kept on paper, electronically, or both?
• 3cHow long do you keep those records before getting rid of them?
• 3dIf you need a financial record that is two years old, how accessible is it?
• 3eHow do you dispose of financial records that are on paper? Do you:?
• 3fHow do you dispose of electronic financial records? Do you:?
• 4Who does your business’s maintenance paperwork and record-keeping? Is it:?
• 4aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 4bAre the business’s maintenance records kept on paper, electronically, or both?
• 4cHow long do you keep those records before getting rid of them?
• 4dIf you need a maintenance record that is two years old, how accessible is it? Is it:?
• 5Who does your business’s license and permit paperwork and record-keeping? Is it:?
• 5aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 5bAre the business’s license and permit records kept on paper, electronically, or both?
• 5cAfter they expire, how long do you keep those records before getting rid of them?
• 5dIf you wanted to retrieve a license or permit that expired two years ago, how accessible is it? Is it:?
• 6Who does your business’s purchases paperwork and record-keeping? Is it:?
• 6aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 6bAre records of your purchases kept on paper, electronically, or both?
• 6cHow long do you keep those records before getting rid of them?
• 6dIf you wanted to retrieve a purchase record that is two years old, how accessible is it? Is it:?
• 7Who does your business’s paperwork and record-keeping for government information requests? Is it:?
• 7aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 7bAre copies of those information requests kept on paper, electronically, or both?
• 7cHow long do you keep those records before getting rid of them?
• 7dIf you wanted to retrieve a government information request that was made two years ago, how accessible is it? Is it:?
• 8Who does your business’s customer or client paperwork and record-keeping? Is it:?
• 8aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 8bAre copies of those information requests kept on paper, electronically, or both?
• 8cHow long after someone stops being a customer or client do you keep those records before getting rid of them?
• 8dIf you wanted to retrieve a customer or client record that was two years old, how accessible is it? Is it:?
• 8eHow do you dispose of customer or client records that are on paper? Do you:?
• 8fHow do you dispose of electronic customer or client records? Do you:?
• 8gDo you secure and limit access to customer or client records?
• 9Who does your business’s tax records? Is it:?
• 9aWhat is the approximate hourly cost of such a person, including benefits, or of the firm hired?
• 9bAre your tax records kept on paper, electronically, or both?
• 9cHow long do you keep those records before getting rid of them?
• 9dIf you wanted to retrieve a tax record that is two years old, how accessible is it? Is it:?
• 9eHow do you dispose of tax records that are on paper? Do you:?
• 9fHow do you dispose of electronic tax records? Do you:?
• 10You indicated that an unpaid family member kept some business records for you. If you had to purchase that service, about how much on a dollars per hour basis, including benefits, would you have to pay for someone else to do it?
• 11If you could pay someone to take over all the paperwork you must complete, how much, on a dollars per hour basis, would you be willing to pay?
• 13Do you have one or more computers in your business?
• 13aDo you have stand alone PCs, a local area network, or both?
• 13bDoes your business use the Internet for business reasons regularly, periodically, or aren’t you on the Internet?
• 13cHow do you reach the Internet?