Paperless statements are great ... BUT only if you download them on a regular basis or use an like Hubdoc to automatically fetch them.
Sometimes when I'm doing backwork for a client, I request some paperwork that is missing. The client signs into their online account to obtain the data I need only to find the eStatement or eBill for two or three years back is no longer available. This could have been avoided if only they had made an effort to download the paperless statements on a periodic basis.
Mr. Paperless wrote a great blog about whether it is okay to leave your bank or vendor statements on the third party website. I found myself nodding my head in agreement as I read through the blog post.
As Mr. Duncan points out, "you are responsible for your own data. Even if you entrust it to a third party, you are still responsible for your own data. You would be well served to take that responsibility seriously."
Each company and financial institution has their own online data retention policies. While often times the statements are available for as long as you have an open account, other times that is just not the case.
A recent example I experienced was when I closed a bank account recently. I had other active accounts with the institution so I didn't think too much about my eStatement(s) for that account. When I went to do my downloads ... okay I'll admit I was a few months behind on this task for that particular account ... access to the eStatements was gone!
I had to phone the bank (which I did immediately while they still had easy access to the data) and request a printed copy of the transactions since my last download. Lesson learned the hard way.
For me this is the big drawback of online banking. If you leave the institution, you lose access to your data.
If you are not using an app like Hubdoc to fetch your statements, please make your life easier and modify your "to do" task list by adding the following ...
During an audit, you will be grateful
you took the time to perform this task. The preferred filing format is
PDF. The task should be done monthly but really quarterly works too! Click here for a tip on the easiest way to print to a PDF document.
Since I first wrote this article, your options have changed. There are a lot of apps out there that will help you collect your documents and store them in the cloud ... reducing your pain point significantly.
LedgerDocs is great if you like to "keep it simple". Bookkeepers rave about Hubdoc's ability to fetch statements but it is my understanding there is a steeper learning curve to get this app up and running.
There are a lot of options out there now. You owe it to yourself to research them and pick one that suits you.
Vancouver consultant Brooks Duncan from DocumentSnap has published the following paperless tools to make paperless transitioning easy-peasy. I relied on these guides when I began the move to working virtually ...
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You Want Findable Documents
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It's tied together with a Document Search Checklist at the end, so people know what they need to do to take action. Get your copy here for just $7 USD.
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Read what Brooks has to say about sending sensitive financial documents by regular email.
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The fifth edition was released in September 2016. All previous purchasers receive the new edition at no charge. If you missed receiving your revised edition, contact Brooks.
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