How to organise financial paperwork

Financial paperwork: two words to make you shudder. Unfortunately, for your business to run smoothly, it’s crucial that you get out of the habit of messy desks and stray files and learn how to organise your financial paperwork effectively.

organise financial paperwork

Do you want the hassle of replacing documents or spending hours searching for missing files? Probably not, but it’s thought that eight percent of company files go missing, with three percent being filed incorrectly. Some files aren’t high priority but others are irreplaceable so it’s worth implementing a consistent organisation system.

To make this less of a chore, I’ll lay out what questions you need to ask yourself before attempting to sort your piles of paper.

1. What files are you keeping?

Don’t go flipping through your papers yet. Before you start to organise financial paperwork, you need to know exactly what you’re dealing with. Your files may include:

  • Tax documents
  • Bills
  • Bank statements
  • Invoices from clients
  • Estimates
  • Expense claims

The way you sort these statements will differ depending on the size of your business.

2. How big is your business?

For a smaller business that deals with less financial paperwork, it might be easier to sort your documents by year first. From there, add a separate folder for each type of financial document you manage. In those folders you can then insert your individual files by month, clients or employee, depending on the nature of the document.

For example:

  • 2016
    • Invoices
      • Invoice #12 – Client A
    • Bank statements
      • Jan 2016
      • Feb 2016

On the other hand, if you own a larger business, sorting your documents by year may make file searching more difficult. Instead, sort them by financial document and create subfolders for the date, client or employee. It could look something like this:

  • Expense receipts
    • Employee 1
      • 2016
      • 2015
  • Invoices
    • Client A
      • Invoice 276
      • Invoice 277
  • Bank statements
    • Jan 2016
    • Feb 2016

For each of your invoices, HMRC states that you must supply a reference number. This reference number could be as simple as a numbering system (001, 002, 003) or as detailed as stating a client, employee or project name, followed by a number (ClientA-022).

The way you reference your invoices will depend on how many you typically deal with. For instance, smaller businesses will benefit from a simple numbering system.

3. Should you organise financial paperwork digitally?

The amount of financial documents you have will depend on how big your business is, how many employees you manage and how many clients you deal with.

No one wants a tower of filing cabinets filling up their office. So, if you’re overloaded with paperwork, it might be worth going digital. This paperless trend is something our government is backing with their ‘Making Tax Digital’ campaign and there are hopes that by 2020 all HM Revenue and Customs (HMRC) documents will be digitalised.

Of course, it’s highly unlikely that you’re business will be able to cut out paper completely. But if you can digitalise some files it’ll help keep your office tidy and your folders easier to manage. (The trees might just thank you, too.)

Be consistent

To organise financial paperwork, you will need to be consistent. Find a system that’s easy for your business to avoid confusion, stray files or folder-less digital documents. The easier your system is, the less time you’ll need to spend per week organising your financial documents. And let’s face it: no one finds joy in shuffling papers, so give future you a break.

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