With the new year comes the inevitable tasks of organizing documents and record keeping. They can be overwhelming, especially because you’re still winding down from the holiday season, but now is the time to get it all done! Here are a few ideas to get you started with this important step for your handmade business- this way you’ll be all set for the beginning of each year!
1. Save Everything
Within reason, try to save all business documents. For example, don’t toss that post office receipt after you mail an order off. There are several reasons to keep receipts- in this case for bookkeeping purposes and also so you’ll have the tracking number. Talk to your accountant about how many years of receipts you should keep. Some might recommend a time period or others might say to keep everything forever.
Extra tip: If you’re out and about are are worried you might lose a receipt or important piece of paper, just take a photo of it on your smartphone! That way you have a copy of it just in case.
2. Back Up Digital Files
When you’re using an accounting software and making digital finance charts be sure to save them in a second place. Portable external hard drives or flash drives are easy ways to save your information. If you’re in a rush you can also email yourself a document. Trust me, you’ll never regret backing up your files! Be sure you store your external drive away from your computer area.
3. File Papers by Each Year
Make one file folder for every calendar year’s receipts and sales documents. Since it can be a lot of papers and feel like a mess, divide and conquer by year and then further organize into months, etc. This will make it way easier if you ever need to locate a particular document or receipt. Once you’ve set this all up for your business you can simply add them on a monthly basis to keep up.
4. Use Tabs and Dividers
The key to being super-organized is using filing systems like tabs, folders, and binder dividers. Get a three-hole punch, stapler, and lots of folders and spread out your supplies on a big table. You should make individual folders for Receipts, Sales Documents, Invoices, Sales Tax, etc., and make sure to clearly label them on the side or front.
Extra tip: Once you’ve decided which file types work for your business go ahead and purchase a few of each. This way you’re all set for the next few years!
5. Keep Business and Personal Records Separate
This is basic advice in general when it comes to running a small business. Always keep your business-related documents apart from those that are for personal expenses. Utility bills, grocery receipts, and other things that are not paid for by business funds should be filed and organized differently than your work papers. This also includes your banking, so set up a separate checking account and credit card exclusively for your business.
6. Hire a Great Accountant
You should have an accountant for any size business, but especially when you start to have a lot of sales. Their role and amount of designated work depends on the sales volume and complexity of your company’s bookkeeping. To find an accountant you can read reviews online and ask your friends for a recommendation. If you don’t feel comfortable with one you’ve met with, find a different one. You’ll (hopefully) be working with them for years to come so it’s important to look around.
What other ideas do you have for managing papers and receipts?
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