This is so that as the year goes on you always have the latest document at the top and you are not having to move months of work over the prongs to get to the latest ones near the bottom. And whether you’re a sole proprietor or a business owner with employees, you should create a file locations list, which will remind users where … This can be in old fashioned folders in a filing cabinet or folders on your computer (or both). Here are a few suggestions for how to organize those pieces of paper and separate them into a logical and efficient format. Keep the two types of information separate in your business filing system. For important correspondence that you receive a lot of, such as letters from your lawyer, keep a separate section called Legal along with copies of invoices from your lawyer. You can head these up with either the bank account type - daily transactions account, savings account, tax account etc., or use the account number. 1. We categorized the files into the following: Clients; Vendors; All other files (reference, business, education) in alphabetical order; As you can see, there are some similarities between the businesses, but each system is customized for the type of business and method of conducting business. An office filing system is a tool that can support the management and growth of your business, or it can hinder its operation. And since tax records need to be retained for seven years, you need a place to store all these records. Subfolder — A folder inside of a folder. If you own a small business, you likely know that you can deduct most of the expenses you incur running your business. An example would be, the category is Utilities and the folders would be ABC … Bins Used to Sort Mail. Organizing office files can be a difficult task, especially if you have large amounts of files and documents, but it does not need to be a painful process. More information Small business filing system paper organization to help you find your documents fast. The Beginner's Guide to Document Management, Get Your Electronic Files Organized With These 10 Tips, Filing and Bookkeeping Tips for Deducting Business Expenses and More, The 8 Best Accounting Software for Small Business, Get Organized With These 3 Easy Home Business Filing Systems, Hate Filing? 1.1k. Most correspondence these days is done by email so you will probably have very little to keep in this section of your business filing system. The traditional filing systems use a filing cabinet, hanging files and manila folders. Dealing with the paperwork is a large part of running a small business. Another method is to file the sales invoices in order of invoice number whether paid or unpaid, keeping track of unpaid ones using a spreadsheet. There are three main terms with which you should be familiar before you create your filing system: File — An individual item, such as a picture or a document. Again, think of the grocery store. How to Organize Your Bookkeeping Records Efficiently . The 8 Best Microsoft Office Alternatives of 2020. Label each drawer a broad topic to help you and others find the right drawer more quickly and painlessly. To create a truly effective filing system, you need to start with a plan.Simply slapping a label on a folder won’t cut it. Physical folders take up a lot of space and can be damaged in a disaster – this problem is non-existent with virtual filing. Foods are organized into sections like produce, dairy, packaged foods, etc. It is important to keep a separate section for any business loans or business mortgages that are taken out. How to Organize Your Small Business Bookkeeping Records Efficiently. To organize, separate the filing system into five color-coded categories, and label each hanging folder according to your needs. For bookkeeping purposes you will need some of, if not all, the following sections/dividers:-, Each section/divider/folder name below is in pink in this article so it’s easy to follow. For most small businesses, a basic filing cabinet will suffice. The number of folders or binders you need will depend on how many transactions your business carries out. To get yourself and your business on the right track, follow five steps to make sure papers are easily accessible and easily identifiable. So bank account No 1 will have a section for the monthly/weekly statements, and a separate section for the monthly/weekly bank reconciliations. I talk about all that on this page. It does take effort and some pre-planning and preparation, but once it is set up you will be ecstatic you did it and it will lift a huge weight from your mind. Like any other organizational project, it is easiest if you create a system.” An organized filing system ensures you can find whatever you need quickly and efficiently. ... But if document creation within your business involves different people collaborating on, reviewing, or updating documents, you’ll need to spend some time deciding how these things should be done to ensure efficiency and consistency. A nonexistent or messy filing system can add days of extra effort at income tax time as you don't want to miss out on tax deductions because of missing receipts. Tips and Techniques on How Successful Companies … How to Organize Your Small Business Records. If you have drawers full of receipts, invoices, and other financial documents, digitizing them can simplify your financial organization process. That way there is only ever one file or section for sales invoices. For correspondence you receive in the post you may be able to simply file it in date order in the correspondence section putting the most recent document at the top. Three very big files. BLOG       CONTACT       SITE MAP       PRIVACY       AFFILIATE DISCLOSURE       DISCLAIMER, Copyright©2011-2020 BEGINNER BOOKKEEPING All Rights Reserved. Simple office bins are attached to a slat wall that can be used to sort incoming and outgoing mail. Mount file holders right on your walls instead of using a filing cabinet or shelf. You can think of this process similar to that of laying down the framework for a new house. A Chart of Accounts helps a business classify income and expense transactions into specific categories and is like a map to the general ledger accounts. The 8 Best Note-Taking Apps of 2020 . Once you have your files in good order, you then need to stick to a consistent system to maintain your files that way. With standard filing systems one can easily lose track with what‘s been paid and what accounts are still open. Bank account No. Steps. var FIX=FIX||{}; Do you keep your business filing system in a box or plastic bag? Organizing Your Bookkeeping, Paperwork & Filing Systems Properly Helps in Running a Successful Small Business in … If you don't have a filing system or a digital archiving system in place, now is the time to build one. Inside the unpaid bills put a-z alphabetical dividers so that the bills can be filed in alphabetical order which makes them easy to find, especially if you have a high volume of bills. Small businesses are small by nature, but the amount of paperwork they generate is anything but small. The following table suggests essential file drawers to label in an actual file cabinet or two and what must-keep information to file in each: Make a keep pile and a discard pile, then shred or recycle all of the papers, magazines, newsletters, cards, notes, etc., that made it … put the latest documents near the top. Below are some general suggestions for categories that work well for many business filing systems. When you produce an invoice, file it into the unpaid sales in alphabetical order and then move it to the paid sales into the relevant month once payment is received (file it into the month you produced the invoice or the month payment is received). If not, the IRS or CRA may demand to see the original paper documents during an audit or routine request for documentation, so keep originals for the prescribed period of time. Organize your passwords. 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