With tax time fast approaching, I have started to give thought to my own business files and those documents that my accountant will be requesting. The key to being able to efficiently address these requests is to have an organized paper or digital filing system where the documents can be quickly located. It doesn’t matter if the system is paper or digital. What is key is that there is a system that works for you.
In my case, I prefer to file these documents digitally. I not only avoid the papercuts that are the result of trying to dig papers out of a jammed back file drawer. I can also quickly and easily download documents from various sites like my payroll processing company or bank. In addition, I’m doing my part for the environment by not printing all these documents. I am also not taking up a lot of the limited file space in my home office with documents that I’ll rarely, if ever, need to review again.
I still need to have a good filing structure in my digital filing system. I have broad categories setup with sub folders within each. For example, my broad category in this case is Financial. Within that folder, I have a folder for each of the years. In these folders, I have a folder for Quickbooks and for 1099’s. I don’t bother putting my payroll tax returns or bank statements in a folder. Once I upload them to my accountant’s site, I don’t usually have to access them again.
Regardless of whether you have a digital filing system or paper one, a filing structure that makes sense to you (and any others who use it) is essential. If you need a tip for making your filing system more effective, I would be happy to share one. Reach out now.