File organization is key to running your business efficiently and ensuring you get all the tax deductions you are entitled to.
If you aren't using any of the cloud apps to organize your receipts and paperwork, this portable paper-based document filing system is perfect for those of you who operate a part of your business from your vehicle such as landscapers and lawn maintenance businesses, home repair contractors, chimney sweeps, travelling disc jockies ... you get the idea.
Incorporate it into your home office organization and small business accounting system to manage your business receipts efficiently.
This portable document filing system will create streamlined file organization so you have all your information available at your fingertips.
This simple filing system will help you get your business receipts organized ... and keep them organized effortlessly. Audits should go smoothly and your accountant will love you at year-end too!
File Organization Suggestion: You may want to use hanging box file folders instead of regular file folders so that you don't lose any small bits of paper as you take the folders in and out of the file caddy to do your data entry.
For this file organization system to work, you must keep the file caddy in your vehicle with you.
As you go through the day, instead of chucking receipts onto the floor of your vehicle … or stashing them in the glove compartment, side door pocket, or purse … take a second to code the expense receipt or sales invoice using your Chart of Accounts ... then open the caddy and place the receipt in the appropriate file folder.
Do the same thing when you open your mail … drop it into the appropriate file in your caddy as soon as you open it. If the mail doesn't pertain to bookkeeping, then leave it in the Mail section to deal with later back in your office.
If you hand write sales receipts (you receive payment on the spot) or invoices (the customer will pay you later), put your copy in the alloted file folder. These documents should always be on pre-numbered forms.
The caddy now holds all of your unprocessed paperwork … nicely organized, coded for data processing, and easy to locate with no effort.
Each night, write up your bank deposit slip for the money you received that day so you can deposit it in the bank the following day. Your cash flow is important so don't put this task off.
Once a week or month (the timing depends on your routine and the amount of transactions you have), bring your caddy into your office, and process each piece of paper you collected. Make sure you stamp it with an “entered” or “posted” stamp so you know you’ve entered the work into your books.
You may want to consider moving to paperless technology to process your work. You will need to organize your paperless workflow a bit differently. If you decide to scan, you still need to keep your original receipts in the event of a CRA audit.
After you have processed your work, file it into the office filing cabinet in the appropriate spot. Your file organization becomes effortless and habitual if you use it every day of the year.
Please don't keep more than one month's receipts in the caddy. Make sure you file the processed documents in your home office. The reason is to prevent loss of your source documents due to a car accident or vehicle theft. Hey .. it happens unfortunately.
For your home office organization, your office filing cabinet should be organized as follows:
If you ever need to pull out a piece of paper work for some reason, have blanks forms at the front of your filing cabinet that you can fill out (i) what was taken, (ii) who took it and (iii) when. Put the slip in the same spot where the paperwork was removed. When you file it back, remove the reminder form. Your file organization remains intact.
If you are going paperless, then part of your processing routine will include scanning all your paperwork into your computer once it has been processed.
Your home office organization is simple ... keep two years of files in your office - current year in the higher drawers and prior year in the lower drawers.
At the end of each year:
This way your office space stays clean and tidy … and you don’t run out of office filing cabinet space.
If you are audited, you just have to pull out your boxed file … everything the auditor needs should be there … as long as you haven’t gone in and taken out pieces of paper and not returned them.
The auditor will love your file organization! Just remember, never let the auditor take original source documents, always make a copy of anything needed for their files.
If your accountant prepares your financial statements and tax return at year-end, it will be easy to copy the documents required, leaving the rest in the prior year filing drawer.
If you have gone paperless, you can put the required information/reports on a CD for your accountant to use.
Your accountant will love your file organization! Just remember, never let your accountant take original source documents, always make a copy of anything needed for their files.
This portable document filing system is a simple and effective way to keep organized all year long.
File organization doesn't have to be a chore ... done right, it's almost like breathing ... you aren't even aware you are doing it. ;o)
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