Tips to Manage Your Financial Documents

Nothing in the financial management of a business seems to frustrate an entrepreneur more than having to read and review financial statements each month.   The detailed analysis is difficult for the passionate business builder to wrap their heads around, especially once every 30 days. Your accountant can help you set up systems that simplify the processes associated with reviewing financial statements, reducing the amount of time you spend on these activities.

  1. Set up filing systems so you can quickly process statements and receipts as they come in, and you can easily find them when you need to.   You can choose to organize them by month, by category, or by customer, whichever is most convenient for you. But do keep each file in chronological order – this will make it much easier to find a particular thing with ease.


  1. File receipts as soon as you get them. A quick note on a receipt stating the purpose of the purchase, the client it was associated with, etc will save you hours of trying to remember small details in the future. Receipts for major purchases can be stapled to the warranty or instruction manual and stored in a permanent file.


  1. Keep all documents until your annual reconciliation by your business. Even though receipts and expenses are reconciled each month throughout the year, we recommend keeping the paperwork until the year is complete. Once the final reconciliation for the year is complete, your business can advise you on paperwork you can shred, and which things are important to keep. You definitely don’t want to throw away anything that may come back to hurt you should an audit occur.


  1. Do set time aside each week to review important documents. If you schedule 15-30 minutes to go over details and review documents while it is fresh in your mind, the process will be fairly quick. If you wait until the end of the month, or even the quarter, it will be much harder to recall an expense you need to explain.