Keeping on top of paperwork
One of the most important things that you are going to need to do as a business owner or manager is to make sure that you stay on top of your paperwork. Keeping on top of your paperwork includes your accounting, personal records, and any other paperwork that your business might run across. The main reason that keeping on top of your paperwork is so important is because the paperwork is a huge part of your business, especially when it comes to filing your taxes. If you go to file taxes and you don't have all of your paperwork you might not be able to lower your taxable income at the end of the year as much as you could if you had all of your paperwork in order. And if you don't keep all of your paperwork in order if you ever get audited you will probably end up in trouble because you need to keep things documented in order to prove that they happened.
Here are some tips that you can follow to help with keeping on top of your paperwork.
Create the files that you need. Although this sounds really simple and it actually is many people do not do it because they overlook it or they put everything into one huge file. This is great if you only have a few items, such as pay stubs, but when you are organizing your expenses for a business you need to have multiple files to store all of your paperwork. If you itemize your deductions you should have a separate file for each deduction. You should also have a separate file for your business expenses, such as utilities, payroll, etc. Keep it all in one spot that is easy to access, such as in a filing cabinet or in accordion files. This will make it easier to track during tax time or if you ever get audited.
Now you need to put the system to use. Many people will create the system and then not use it until it is April and taxes are due in two weeks. By immediately filing your paperwork in the appropriate spot on a daily or weekly basis you will not have to do it at the last minute, thus making tax time a bit less stressful. By taking care of it in a reasonable amount of time you will be able to better track where things are on a moment's notice.
Sort your receipts. Basically what this means is rather than putting all receipts into one file folder you should put them with each expense. By keeping your receipts sorted you will find it is easier to find the correct supporting documentation you need if there are questions on your taxes. Besides this is why you created individual files in the first place so that each group is in its own folder making it easier to sort and easier to find what you need.
One of the best ways that you can make sure that you keep on top of your paperwork is to make sure that you have backups of everything. This is especially important if you plan to document things on your computer rather than keeping paper copies. But when it comes to backups you are going to need to make sure that you keep a copy of these in a secure location. You can also keep your original receipts in a secure location so that if there are ever any questions you have a paper and computer backup of everything.
But one thing that you need to know about keeping up on your paperwork is that it is very important to do because you need to know how much money is coming in and how much money is going out. But the best thing that you can do to keep on top of your paperwork is to get in the habit of doing it, basically set aside a certain time each day to manage your paperwork.