The Best Ways to File Your Business Paperwork!

One of the biggest sources of headaches and wasted time is mis-management of paperwork, and paperwork clutter.  Without a simple filing system and process in place, you create future work & double work.  Follow these tips to successfully wrangle your paperwork flow!

• Put it in it's home as soon as it comes in - To avoid the dreaded pile of paperwork that buries what needs to be done and adds clutter to your life and mind, follow the 'touch it once' rule. When you open your mail, file it right away. Have a stapler and staple multi-page mail right away! Setting up your system ahead of time so it all has a home is a huge time saver, and saves brain bandwidth! 
  
  
• File Folder Homes - For your business paperwork, I suggest 6 folder types;
  1. To Be Processed - This folder is for bills and receipts that need to be entered into the bookkeeping. It also is where to file the bank statements before the bank is reconciled. Every week on your #WeeklyWinDay you must go through this folder and enter the paperwork into the bookkeeping. If you get in paperwork that does not need processing, DO NOT FILE IT IN THIS FOLDER. File it directly in it's monthly folder, or in the Year End folder.
     *VERY IMPORTANT*: If you do not enter the "To Be Processed" folder weekly, then you should have a "To Be Processed" file for every month. ("To be processed January", "To be processed February", etc) This way, if you get behind, or if you give your paperwork to an outsourced bookkeeper IT IS ALREADY SORTED BY MONTH! I cannot stress enough how important this is. 7/8/21 can be both July 8th or Aug 7th. It is a waste of time to sort by date, especially with guessing on cryptic dates. This will not need to be done if you file it in the correct month as the paperwork comes in. Do not make double work! Keep it easy! Don't pay someone to do something that could have been done magically without any actual work simply by employing this super hack!
     
     
  2. To Be Paid - Once a bill entered into the bookkeeping on your #WeeklyWinDay from your "To Be Processed" folder, if it is a bill that needs paying, then you can move it to your "To Be Paid" folder. On the 15th of every month (or your #WeeklyWinDay that comes before the 15th), open this "To Be Paid" folder and pay all of the bills for the month prior.
     
     
  3. 12 Monthly Folders - One for each month, with the year. "Jan 2021" "Feb 2021" etc. Once processed, your paperwork can now be filed by month. That is, once the receipts are entered, file them in their month. Once the bill is paid, file it in it's month. Once the Bank Statement is reconciled, file it in it's month. If you get in anything that does not need entering, you can just file it directly into it's month.
     
     
  4. Year End Folder - For example "Year End 2021". This folder is for A) All those items you want to have handy and ready for your Year End Tax prep (I put in copies of asset purchases for example), and B) all of those items that are not related to a specific month, such as Insurance Renewal, Property Taxes, Annual Mortgage Statements etc. It will also be where your final tax return goes for the year once completed. If you have employees, it is where your T4s will go once filed.
     
     
  5. Employee Files - A file per employee, if you have employees.
     
     
  6. Permanent - For your business license and a handful of other items that you do not wish to file away each year.
     
     
• File Folders, hanging folders, and plastic file boxes - The easiest and most convenient way to file paperwork is in file folders, in hanging folders, in plastic file boxes.  File Folders should have a clear title written on them. (If you want printable labels for the suggested folders above, you can download them here!). File folders in Hanging Folders are EXPONENTIALLY easier to use and access.  Those accordion style filing contraptions may be 'pretty', but they are also pretty annoying, hard to store, difficult to file in and out of, and the receipts fall between the gaps at the bottom.  Also, the cardboard file boxes that many people use  do not accommodate hanging folders, damage easily, and are scary to stack.  The best advice is to store in plastic file boxes. These are water resistant and sturdy. My favorite boxes I get at Staples. Another great box, for smaller businesses or traveling paperwork, is this box from Amazon. In the current year, all my files are in hanging folders, but for past years, I take the file folders out of the hanging folders and archive them without the heavy hanging folders. For archiving, hanging folders take up space and weight. But for the current year, hanging folders make life much easier. Also, don't file "legal" direction. It wastes so much space! 95% of your files are letter sized, so file "letter" direction to save so much space!!!