How to Keep Your Financial Records Organized

How to Keep Your Financial Records Organized
by: Linda Siniscal



People just have too much paper to deal with – even though computers were
to help us in that area – it just has not happened for most of us. I am
going to offer you some quick tips to help you in keeping your financial
records and receipts organized throughout the year.

1. Monthly Transactions. I have found that this system works well for
many small business owners. Create a file folder January through
December. Keep two months on your desk (January – February; April – May)
in an area that is easy to get to – colored file folders really help too.
When you make an online purchase, print out the receipt and place it in
the file folder marked for that particular month. The same holds true for
those toll receipts or the lunch you purchased when you met a potential
client. When your credit card statement comes in, and after you have paid
the bill, place the statement along with your month-end bank statement in
the file folder. Now you can either send the file to your bookkeeper or
if you are the designated bookkeeper, once you have reconciled your
accounts file the completed month away in your file cabinet.

2. Client Invoices. When a client invoice is prepared, print out an extra
copy and file it in an invoice file marked for that particular year. At
the end of the year you will have a record of all the income you have
billed. In case of a computer hard drive crash, at least you will have a
record for tax purposes.

3. Mileage Log. You can easily create a mileage log in Excel to track
your trips to client meetings, running to your local office supply store
to purchase the ink cartridge that just ran out or perhaps the run to the
post office for postage or mailing of the proposal to a new client. We
also can’t forget about the networking events that you are attending as
part of your stepped up marketing plan. The spreadsheet should have a
column for date, odometer start/end, total miles, and description.

4. Out of Pocket Expenses. For those cash outlays we do throughout the
year – the coffee at the airport, the tolls paid to a meeting, or the
quick lunch at a seminar, keep these receipts in a colored envelope
marked with the year and keep track of the expense in an Excel
spreadsheet. You can then total either monthly or quarterly and reimburse
yourself for those expenses. Please be sure to hand off the receipts and
the spreadsheet to your accountant at year-end.

5. Tax File. Create a tax file folder at the beginning of each new year.
Throughout the year, place any tax related expense in that file such as
medical receipts, prescriptions, monthly or quarterly investment
statements, property tax bills, and year-end bank interest statements. At
the end of the year when you are gathering paperwork for your accountant,
most of the information will already be there for your accountant and you
won’t be wondering where you placed the tax refund notice you received in
April.

6. Bank Statements. For those that do not receive monthly bank statements
in the mail, I suggest you create a file folder for bank statements on
your computer. Each month, download the file from your banks website and
save in this folder. You can set up the folder as a password protected
file if you have other people using your computer. At the end of the
year, burn all the monthly statements onto a CD and store with your
income taxes for that year. Most banks only hold 18 months of statements,
some only 12 months on their server. The IRS requires you to hold 7 years
of bank statements in case of audit. Once the CD is created, you can then
delete the files from your computer and create a new folder for the new
year.

I hope you find these tips helpful and soon will not feel so overwhelmed
at the beginning of the new year trying to get all your files in order
for tax preparation. If you are interested in receiving a Record
Retention Schedule that the IRS recommends for businesses, please email
me at linda@yourextrahand.com (Link: mailto:linda@yourextrahand.com) and
I will be happy to forward it along to you.

Happy organizing!






About The Author
Linda Siniscal is the owner of Third Hand Secretarial Service LLC which
she started in 1994. THSS is a virtual assistance company that assists
small business owners with their administrative and bookkeeping tasks
allowing her clients more time to focus and grow their business. THSS is
an “extra hand when you need one.” She served on the International
Virtual Assistants Association (ivvaa.org) Board of Directors for the
term 2005-2008. You can email Linda at yourextrahand@gmail.com or call 732-899-0810 – http://www.yourextrahand.com