Keeping track of paperwork when running a small business is often a tedious task business owners do not have the time or energy to maintain. That is why having a solid system in place is so important to quickly shuffle paper where it needs to go. A successful filing system will help others help you retain and reference what is most important each day.
Whether starting out on your own as a first time entrepreneur or finally making the time to organize your piles, your business will run much more efficiently with organized paperwork. Record retention and work flow systems do not need to be complicated. The two main goals are to know where to process and file incoming paperwork and where to find it when you need to get your hands on it.
How do I begin to organize my business paperwork?
You may be a busy entrepreneur wearing too many hats in your business. Or maybe you are a big picture thinker that hates to deal with tedious projects like filing, sorting and categorizing. If you are just beginning your business, you may still be learning what you need to even keep track of. In any of these scenarios the same rules for creating a plan apply.
- Decide where and what you will house physical paperwork in? A file cabinet, a portable file, binders etc.
- Sort the paperwork you have into some general categories (i.e. customers, vendors, accounts payable (bills you owe) , accounts receivable (invoices owed to you) etc.
- Purge any paperwork along the way that is redundant, not needed for reference or tax purposes, or needs archiving.
Now you have a general idea of what you are dealing with. You can choose how big of a file drawer or cabinet you will need. You can also begin to think about the next level of subcategories you waant for files.
Think about activities you do daily and monthly in your business
In addition to looking at your general categories of small business paperwork, you should think about different processes and activities you must conduct with that paperwork each day or month. For instance, if you have purchase orders with vendors. You will want to think about a system for creating, tracking and receiving products with purchase orders. Will you need a binder with tabs for quick reference? Or are you printing out paperwork unnecessarily that can be tracked in bookkeeping software such as Quickbooks?
As you think about these processes, consider how many people in your business will need a access the paperwork. How many hands need to touch it or reference to get a bill paid from start to finish, or handle an estimate before it turns into an active job. Will you need to keep physical copies of this paperwork in a drawer or can it be scanned into a digital file?
Creating your own custom system for organizing your business paperwork
Remember that every business is unique, therefore while there are general themes/topics of paperwork to track, you will ultimately customize it for you or your team. You need to consider each person’s strengths and weaknesses for maintaining different types of systems. You will also need to work within the space and furniture you have available in your home or off-site office.
I always tell my clients, do not use a binder to file paperwork if punching three holes will prevent it from actually getting in the binder. Some people need very detailed files with minute subcategories. Others like general hanging file tabs and want to quickly thumb through the folder when they are looking for something. There is no right or wrong as long as it works for you.
Create a system that plays to your strengths. Use words for your file tabs that make sense to the majority of the people doing the filing. Make sure your file drawers are accessible and visually easy to read when you open the drawer. I always recommend straight line filing so your eyes do not have to dart around reading tabs. You will have much better success at maintaining the paperwork if what you create is easy to follow. Consider purchasing a label maker to make quick clean labels for your files like a Dymo Letratag.
Is creating a small business paperwork filing too overwhelming?
You may be reading this already feeling tired thinking about the project ahead, especially if you are not interested in detail oriented tasks. That is why I created The Complete Small Business Filing System. As a professional organizer for almost twenty years, I have set up my fair share of filing systems for small businesses. I also do bookkeeping and small business consulting for over thirty small businesses. I wanted to take that experience and make it easy for someone to have an instant system to start.
My printable PDF file contains instructions and tips for filing. But more importantly, it also contains the most common labels needed to sort and file paperwork for small businesses. In addition, I added tabs to archive tax paperwork for the past, present and future years. There are alphabet tabs to quickly create alphabetical files for customers or vendors. There are binder tabs and hanging file tabs. Labels can also be printed as manila file subfolders.
As a busy small business owner myself, I know how valuable time is when balancing work and family. Starting with a system you do not have to overthink makes achieving the organization goal much more efficient.
Maintaining Your Small Business Filing System
Once you have your system in place the next challenge is maintaining it. Keep up with your paperwork by trying to file items immediately. Avoid setting up a “To File” pile if you can help it. We all know that tends to become the real filing system or what I like to call the “Procrastination Pile.”
Work on cleaning out your files every six months to a year. I like to archive any pertinent paperwork for tax back-up with that tax year. It removes it from the daily files and still allows it to be easily referenceable Store your older business files related to taxes for at least 7 years. Cardboard bankers boxes or plastic file bins are a great way to remove them from the drawers and stack them in storage. Be sure to label the outside of the bin so you know what years the containers hold.
Be ruthless about what you actually keep. Many of us hold onto paper for fear we may need it again someday, when in reality there is no longer a purpose for it. Consider digitizing paperwork you are not sure about tossing even if you believe you will not need it. I like to mimic the file folders in my drawers on my computer so I have a parallel system for filing. You can reduce a lot of space in your office by moving to a digital filing cabinet. Be sure to have a good back-up system in place like Carbonite if you are planning on storing important materials on your computer.
More Filing Tips
I often write about organizing paper in my blog because it is such a common organizational struggle. In fact, it is the niche I love the most helping with as a Professional Organizer. Check out some of my other blog posts on household paper organization at www.livablesolutions.com/blog. In addition, I have created many paper organizing systems for home filing, organizing memorabilia and greeting cards, creating a home management binder as wells as tickler file system. Check them out at my shop Life’s Lists.
I hope these tips help you start your organizational journey to a better small business filing system.
Kristin Vander Wiede is a Professional Organizer and owner of Livable Solutions Professional Organizing and Life’s Lists printable organizing labels, systems and activities.