bookkeeping, office management

Filing System Management


It’s that time of year again. The year-end hustle. You’re trying to find all of your tax documents, when you SWORE to yourself last year that you’d stay on top of them.

So maybe you didn’t exactly stay on top of the piles. Here’s a little filing system how-to guide to get you caught up and ready for the new year.

1. First Things First. Organize your documents. Separate your piles into piles. This will take some time and work!

The categories I recommend you begin with are: Income (deposit details, deposit slips, check stubs, credit card reconciliation) , Expenses (bills you’ve paid, receipts and check stubs), Financial Documents (bank statements and credit card statements, loan documents),  Employee Documents (current and past W-4s, singed employee handbook, applications, resumes, performance reviews, disciplinary actions, etc), Business Documents (licenses, EINS, incorporation documents), Planning Documents (operating agreements, marketing plan, big ideas, etc), Retention Documents (Tax Returns) .

If you are a Farmer or Rancher you might want to add: Cattle, Sheep, Livestock or something similar (keeping track of your numbers and their location) and Fields (location and current planting status).

You’ll also have invoices that are yet to be paid by you or to you. An easy to reach set of files on your desk is a good place to add your “Accounts Payable” folder and possibly your “Accounts Receivable” if you have only a few documents for this file. Otherwise, include Accounts Receivable with your other folders in an easily accessible drawer, preferable eye-level or the top drawer.

2. Next you will need to organize the smaller piles into folders and a fling cabinet. I recommend you buy a high-quality filing cabinet that locks and has plenty of room to store current documents and extra room for future documents. For my bookkeeping business, ranching business and personal documents, I use a large 4-drawer filing cabinet because I knew I wouldn’t grow out of it.

You’ll want to label each file. I prefer to use the Avery File Labels- you can download the template from Microsoft Word. Within your Income and Expense Folders, you will separate these into sub-folders. I find that organizing these sub-folders chronologically works best for most business and individuals. So within each Income and Expense Folder, create folders January-December. The Financial Documents folder will generally have sub folders along the lines of “Checking, Savings, Credit Card, Loans, etc” and within each of those you will indicate the specific account, i.e “1st Bank Checking”, “Cabela’s Credit Card” and these folders will be organized alphabetically, with the documents organized chronologically in each folder. Within the Employee Documents folder, I recommend you create a file for each employee with their individual employee documents.  You may have only a few documents for your Business Documents folder and can file them all together alphabetically or you can make sub-folders, whichever seems to work best for you. The same can be done for Planning Documents. Lastly, you’ll probably come across documents that need to be retained, including previous years’ tax returns and the corresponding work papers and documents. For the exact retention guidelines, you can visit Montana Secretary of State website or Internal Revenue Service website. I recommend these stay in your filing cabinet for at least three years after which they can be moved to storage throughout the rest of their retention requirement.

Keep in mind, if this is all happening in December, it will make the most sense to double your Income, Expenses and Financial Document Folders. One set for this year and one set for next.

3. Now that everything is filed and organized, you will want to create a workable filing schedule in order to keep everything filed. Along with your easy to reach files on your desk an inbox is essential. I’ll walk you through your daily, weekly and yearly paper clutter and filing schedule.

Daily: Sort Mail an Emails- Add bills to Accounts Receivable, Add Documents that need filed to Inbox, Receive Payments like you normally would.

Weekly: File everything in Inbox. If the document doesn’t have a place, make one! As your bank statements and credit card statements come in, be sure to reconcile them. This process is unbelievably easy to do on QuickBooks Online. Just give me a call if you would like to hear more about setting up a new file or transferring your old QuickBooks Desktop file to QuickBooks Online.

Yearly: When all of your documents have come in for the year (including bank statements, etc), you will want to move your Income, Expenses and Financial Documents to a Tax File to be given to your bookkeeper or tax preparer. At this time you can also move tax documents older than three years to storage. Make sure to mark your storage boxes clearly on all sides and the top. This will save the hassle of wondering what’s inside later. Also check your storage and determine if any of those documents are past their retention date. I also recommend you cull your employee file- any employees who weren’t employed with you for the last two years can be moved to storage. The same can be done with yearly business licenses. Don’t throw these away, but its safe to file them in storage.

4. The last recommendation I’ll make is to begin converting your files to electronic files. This process is very easy to do with a scanner of your own, Fujitsu ScanSnap (mine is the ix500) is a great product to use for this. A lower cost option is the Portable Fujitsu Scanner or this Portable Brother Scanner. My office also provides scanning services if you would prefer to outsource.

Comment with any questions you may have.

Happy filing and hopefully not PILING!

– Michelle

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