I’ve owned and managed businesses for over a decade and been around business owners for even longer than that. Some businesses drown in paperwork while others exist with a debit card and a wallet full of cash. One business can produce copies of a year’s worth of receipts in minutes while the other needs hours at the bank just to generate a summary.
While some may argue that too much documentation isn’t a bad thing, it can detract from time otherwise spent on productive business activities. So how do small business owners find the balance? How much paperwork is too much or maybe not enough?
The overall number of printed records has declined drastically in the last few years. Most checkout systems at brick-and-mortars will email you a receipt; but let’s face it—we mostly shop online anyway! Most of the files and documents that small businesses need to save are already conveniently emailed to us or available for download. The problem most small businesses face is in determining what is worth keeping and what can be discarded.
To start, don’t try to save paper copies of any documents. As soon as they land in your hand, scan and upload them to the cloud. Organization is streamlined when all your documents are on the cloud. As you prepare to close out last year, here are the documents that you should save:
Most banks give access to online statements for years and years, however, that access is revoked when you close the account. Instead of trying to remember to save years of data before you close an account, make saving all your statements a year-end habit.
Checks and bank deposits
Not all bank statements contain copies of checks and deposits. If your statements don’t include this information, download the images at year-end. Most banks don’t keep this type of information online forever so be diligent about saving these often.
All tax documents and letters
The IRS and most state tax agencies will communicate almost exclusively by mail. Although these documents are already printed, scan them in as soon as you receive them. And remember to also keep copies of anything you mail in.
Tax returns and efile confirmations
In our digital world, even tax returns are not printed anymore. But that doesn’t mean you should neglect to save a copy. While tax preparers are required to keep records for many years you can’t rely on readily available access in the future.
Keeping receipts for everything is a tedious process. Scan each receipt while still at the register.It takes only a few seconds and then it’s off your mind. If you let your receipt pile get too big, it’s likely to be neglected and the ink faded by the time this task finally makes it to the top of your to-do list.
Not all your financial transactions pass through your bank. Sometimes you trade in one car for another or finance a large purchase. The purchase and loan documents are crucial to filling out tax forms correctly.
The record-keeping requirements for most business owners are minimal; however, that doesn’t mean they can be neglected. Each business owner needs to develop a system that will help them manage the paper and digital trail. And while this process is very simple in today’s cloud-based world, it still requires action on behalf of the owner. Save these documents on a regular interval: it will simplify your business and save you money.
The post Small Business Owners: Here’s What You Need to Keep, Here’s What You Can Shred appeared first on Entrepreneur and is written by Vlad Rusz
Original source: Entrepreneur