How to Help Your Client Organize Their Records

Most of our clients are looking for us to not only record their transactions accurately and produce their financial statements, but also be able to answer their questions quickly and have the information at our fingertips. One of the ways we can accomplish this is by spending some time up front organizing their records and making suggestions that will allow us to quickly locate documents.

Most company documents fall into a few categories with very different requirements:

Company Documents

This category represents information that references the Company’s organization, legal documents, shareholders, board of directors, and company meetings. Examples include: Articles of Incorporation, Meeting Minutes, Shareholder Information, etc. This information is highly confidential and usually only accessed by officers of the company and the Controller. I would expect these files to be in a locked file cabinet or in the CFO’s office.

Transactional Files

This category includes daily and weekly transactional information. Examples include: paid Accounts Payable invoices, Accounts Receivable invoices, Purchase Orders, Receiving Documents, etc. These documents are generally not confidential; they are frequent and may need to be accessed by several different individuals for different reasons. These files usually serve as source documents for audits. Best practice is to file the documents alphabetically by vendor or client name, last name first if an individual. The full name should be on the file folder. These files do not normally need to be in locked file cabinets but should be located in the accounting department.

Reference Documents

Reference documents are Contract Files with Original Signed Contracts, Vendor Files with Contact Information and Terms, Insurance Policies, Credit Card Agreements, etc. These documents are semi- confidential. They will be accessed by several individuals, but only those with authorization to do so. This should be a limited number of people. While I would not expect these documents to be in a locked file cabinet, I would expect them to be in a restricted access area.

Payroll & Tax Documents

This category contains all transactional payroll reports, quarterly filings, annual filings, corporate and state tax returns etc. These files are obviously highly confidential and kept in a locked cabinet or in the CFO’s office. These files are usually restricted to the payroll processor, the Controller and/or CFO and the CEO and COO of the company.

There are a few notable exceptions:

  • Government Agencies have a completely different set of rules governing confidentiality.
  • Companies that have any kind of medical patient information. There are strict laws governing HIPAA requirements that must be adhered to.

Every company has a different philosophy on the level of confidentiality their records deserve. Some companies prefer to keep the Reference Documents under lock and key. It is also our responsibility to honor each company’s policies whether we agree with them or not. We can, however, offer suggestions to improve work flow when appropriate.

Written by:
Nancy Brzezniak
TGG Accounting



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