Working with small businesses, the one refrain I hear over and over from my clients is “How do I stay organized? I have paperwork everywhere!”
This is a challenge for all of us. As your business grows, there are more demands placed on your time, and without a solid system for staying
organized it’s easy to let the receipts, invoices and statements pile up.
These are some suggestions I have for keeping your bookkeeping paperwork in order:
Go to your local office supply store (or the dollar store can be an excellent place to get storage solutions) and pick up some nice decorative boxes or folders that you will use just for your business paperwork. These folders should be placed strategically in the places where your paperwork tends to get deposited.
If you drive for your business, even if it’s just around the city, you may find that your car becomes your office, lunch room and filing cabinet. Put one of the folders you purchased in your car, maybe between your front seat and your console, or under the passenger seat, or in the glove compartment or the compartment on your door. Every time you get into the car, put your receipts into the folder. This is great if you have just filled up with gas, or gone on a business lunch. Once a month you will clear out this folder. Don’t worry about sorting out the business and personal expenses – there will be time for that later. It is better to save a receipt you don’t need than to accidentally throw out something you may need later.
For many of us, the front door of our house is another place we accumulate paperwork. For others, it may be our study, or perhaps the kitchen counter. Wherever you see receipts starting to accumulate, this is where you need another folder. When you get home at the end of the day, empty your pockets, wallet and purse/briefcase into the folder. This applies to the mail also – when you get your bank statements put them in the folder. When you get bills, pay them (always a good idea!) and then put them into the folder.
Once a week (or once a month if that’s better for your schedule) take the folders into the office and empty them onto your desk. Sort through them and remove the personal expense, but be careful. Some items on your personal receipts may still be business write-offs. For example, if your office is in your home you may be able to write off a percentage of your cleaning supplies, so keep those receipts and circle the business portion. Put all the business papers into the master office folder.
The main folder is what you are going to give your bookkeeper every month, so you may want to get an accordion folder with alphabetical slots so you can give it to him/her organized. Some bookkeepers are fine with one folder with everything mixed up. Personally, I do not ask my clients to organize the paperwork, as I know that I will be going through every piece of paper myself and consider organizing and filing the papers after to be part of the service I provide.
Following these steps should help you to stay clear of the paperwork avalanche that can trap small business owners so you are free to work on your business.