Now that you have spent the last couple of months preparing your tax reports to Uncle Sam, it’s a good time to ask, how did your filing system hold up to the task? Were you able to retrieve business records and documents quickly or did you spend frustrating hours searching (read the article “Good Record Keeping for Your Small Business“) . An assessment of your current filing system may reveal that an overhaul is in order.
First, let’s identify that there are two types of files:
- active files that hold resource materials which are regularly referred to for information; and
- permanent files which are rarely referred to but contain records we are required to retain, such as tax and legal records.
Active filing systems do not include permanent records. They take up valuable space and are referred to only rarely, if ever. It is best to archive these records separately in boxes (clearly marked, of course) or file storage containers in an area that is accessible but out of the way. Which of these records should you keep and which can you trash? Best check with your CPA or accountant first. Every day filing systems contain only those records and documents referred to on a regular basis to retrieve information necessary for running a business or household.
Here are a few tips for maintaining an efficient active filing system:
- Base filing on retrieval, not storage. Instead of asking yourself, “Where should I file this?” ask yourself, “Where would I look for this if I need it?” Then label the file accordingly.
- Consistently insert new papers into the front of the file folder. When purging files, start from the back where the oldest documents are.
- Purge files annually. You will be able to find needed items quicker and will save on storage space.
- Use color coding for easy, quick identification. Office supply stores have all kinds of files and labels to do this.
- Always alphabetize. The obvious reason is to save you time when looking for a file. Cleaning up your computer hard drive will also work wonders for your efficiency. Through disorganized use of computers, over 7% of time is spent finding misplaced files, and 3-5% of all files are lost.
- Free up memory space by deleting old versions of software applications or unused programs.
- Remove document files to floppy disks to give more space on your hard drive and prevent loss.
- Organize your hard drive and your external drives by creating directories or folders. w Use identical systems when organizing hard drive, floppy disks and paper files. Color code disks to match your paper files.
- Back up files regularly. How often depends on volume of files created over a given period of time. Back up weekly or at least monthly.
- A well organized filing system frees your mind of that nagging worry – will I be able to find it if I need it? You always will.
- Record-Keeping: How to Keep Business Records
- How to Organize Your Home Office
- 10 Minutes a Day to Organize Your Office
- How to Organize Your Home Office (blog)
Recommended Books on Maintaining an Efficient Filing System:
- File…Don’t Pile: A proven filing system for personal and professional use
- How to Organize (Just About) Everything: More Than 500 Step-by-Step Instructions for Everything from Organizing Your Closets to Planning a Wedding to Creating a Flawless Filing System
- Keeping the Books: Basic Recordkeeping and Accounting for the Successful Small Business
- Keeping Financial Records for Business
- Records Management For Dummies
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