Plan :: Keeping Your Paperwork Under Control

Tips to Keep Your Paperwork Under Control

I am often asked how best to organize bills, checks, receipts and the like. Honestly, there is no “right” answer to that question. First, I would say ask who needs to access and use those documents. If it is only you then you will need to come up with a system that works for you. But, more often than not, someone else is going to need to find something contained in your system. So the key is to find a balance between what makes sense and works for you and making it simple enough for someone else to understand.

I find that the simplest organization of that pesky paper is an accordion file. I get one that has 13 tabs so I have a section for each month of the year. I label the tabs January through December and then as the bills are paid or receipts are collected I just slip them into the appropriate month. You can also use that same accordion file and label the tabs with categories. If the file is for personal use, label it with household expenses like rent or mortgage, utilities (individually if you like), groceries, clothing, etc. If it is for your business you can label the tabs with business expense categories like office supplies, rent, advertising, etc. Either way, you will have something that is easy to navigate.

Do you have too much paper for an accordion file? No problem. You can always expand the size of your container. Move to a large three-ring binder. You can either use page protectors to slip the small receipts into or tape them down to paper to put into the book. You can even go as large as a file cabinet drawer or the whole cabinet. It just depends on how much paper you have.

Finally, scanning paperwork and going paperless. I always get questions about scanning things and throwing away the originals. This is not an easy question to answer. I tried to call the IRS to find out if a digital copy of a document would be acceptable in an audit. The person I spoke to quoted an obscure publication that really didn’t say “yes” or “no”. My opinion is that until I hear from actual clients or business owners that they went through an audit and the digital copy was okay, I am keeping the paper.