Redacting Client Financial Documents

As a bookkeeper or accountant, you regularly handle bank statements, tax returns, payroll records, and financial reports that contain client SSNs, bank account numbers, and confidential business data.

When clients need these documents shared with third parties—lenders, potential investors, attorneys, business partners—you're often the one preparing and sending them. The question is: how much should you share?

Common Sharing Scenarios

What to Redact on Client Documents

Bank Statements

• ✓ Keep: Business name, bank name, dates, deposits, balance
• ✗ Redact: Full account number (show last 4), routing number
• ? Consider: Transaction details may be redacted depending on purpose

Tax Returns (Business)

• ✓ Keep: Revenue, expenses, net income (what recipients typically need)
• ✗ Redact: EIN (sometimes), owner SSN, bank account info
• 💡 Tip: Ask what specific information is needed—often a summary suffices

Payroll Reports

• ✓ Keep: Total payroll expense, headcount
• ✗ Redact: Individual employee names, SSNs, salaries
• ⚠️ Note: Individual payroll data rarely needs to leave HR/accounting

Accounts Payable/Receivable

• ✓ Keep: Totals, aging summaries
• ✗ Consider redacting: Specific vendor/customer names if sensitive

Best Practices for Client Document Handling

1. Always Get Client Authorization

Before sharing any client documents with third parties:

• Written authorization specifying what can be shared
• Who the recipient is
• What the documents will be used for

2. Share Only What's Necessary

When someone asks for "bank statements," find out:

• What specific information do they need?
• What time period?
• Will a summary work instead of full statements?

3. Create Redacted Versions in Advance

For documents frequently requested, maintain:

• Original (full detail) in secure storage
• Standard redacted version (account numbers removed)
• Summary version (key figures only)

4. Use Secure Transmission

Financial documents should never go via unencrypted email. Use:

• Secure client portal
• Encrypted file sharing
• Password-protected PDFs (share password separately)

5. Document Everything

Keep records of:

• What was shared
• With whom
• When
• Authorization received

Protecting Your Clients (and Yourself)

Proper redaction protects your clients from identity theft and data exposure. It also protects you from liability if documents are mishandled after you share them.

Common Questions from Clients

"Can you just send them everything?"

Explain why redaction matters: "I recommend we redact account numbers and SSNs. The recipient can verify your finances without getting information that could lead to fraud if this email gets forwarded or their systems are breached."

"Will they accept redacted documents?"

Most legitimate parties do. If someone insists on full account numbers for no clear reason, that's a red flag worth discussing with your client.

"It's just going to my attorney—is it necessary?"

Even trusted parties can have data breaches. Redacting unnecessary details is good hygiene regardless of who's receiving.

Setting Up Your Workflow

1. Intake: When receiving client documents, note what sensitive data they contain
2. Storage: Keep originals in secure, backed-up storage
3. Request handling: When sharing is needed, create purpose-specific redacted versions
4. Transmission: Use secure channels, document what was sent
5. Retention: Clear old redacted versions; maintain originals per engagement terms