Accounting Tips: Filing Documents

In today’s fast-paced environment, who has time for filing documents? It is much easier to keep documents in piles, strategically ordered by the most recent document in front. Ultimately, you end up with what most people call an organized mess. In the event where a specific document needs to be located, scouring through the piles could take much longer than desired. Here are a few tips and tricks on how to save you from a filing debacle:

Use Electronic & Physical Files

Use an electronic and physical file to provide the most flexible and accessible files. In the event where there is no computer access, the physical file would be the most useful. If you are constantly traveling, accessing the files electronically would be one of the best options when searching for documents.

Separate into Financial Statement Cycles

Separate your files in five categories. In case the Internal Revenue Service randomly audits your company or you need to be audited to qualify for a line of credit, you would want to be prepared. Show the auditors that you know a thing or two about the audit process by keeping your filing system parallel to the five financial statement cycles; (1) sales and collection, (2) payment and acquisition, (3) payroll and personnel, (4) inventory and warehousing, and (5) repayment and capital acquisition. To learn more about the five financial statement cycles, please read my other blog titled, “Financial Statement Cycles.”

Organize by Year

Separate some of the cycles such as sales and collection and payment and acquisition into years. For example, if a company receives a vendor bill and has issued payment for the bill, the bill and payment record needs to be filed under the payment and acquisition folder, 2011, and vendor’s file under closed accounts payable.

Take a few minutes each week to properly store documents. As tedious as filing is, it does and will save time and frustration in the future. For more information on Best Practice with filing systems, call TGG Accounting today.

Written by:
Erika Marasigan
TGG Accounting

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