I admit that I’m not the most organized person in the world when it comes to my family’s finances. And now that I’m running my own business, I’m seeing my weaknesses getting the better of me as I scramble to keep records that I’ll need to submit to our CPA during tax season. Unfortunately, keeping our important documents and information in order hasn’t been my strongest point – I’ve found that I just don’t excel in activities I don’t enjoy doing. But I’m working on these limitations and I’m hoping that I’ll improve my ways over time or else I’ll be paying for it in missing cold hard cash.
There are many opportunities for saving money, receiving rebates, or taking tax-deductions that are missed by many people like me, mostly due to disorganization of paperwork and inadequate record keeping. It's true that filing paperwork and being organized isn't the most exciting thing for most people – but how you file your financial paperwork and related information can really make a difference to your bottom line and peace of mind. That said, here are some of the things I’ve been working on (and processes I’ve been developing) to get my financial paperwork in order:
What’s The right filing system for your receipts?
Everyone is different. There is no one-size-fits-all approach to filing: what works for one may create an even bigger, disorganized mess for someone else. The key is to find a solution that works for you.
So let’s talk about receipts for a moment – which is one thing that most of us should probably care about a little more than we usually do. Some people resort to tossing receipts in their wallets, others zip important slips of paper into a purse, some put them in the center console or glove compartment in their car – while others just throw them out! If you find that keeping receipts in your wallet is causing your wallet to become too bulky, too fast, then consider keeping a zippered pouch or folder in your car. Whenever you make a purchase, toss the receipt in for filing later.
Unfortunately, this method for managing receipts just doesn’t cut it for my spouse. He can't stand going through a folder of receipts at tax time, trying to figure out what to do with them. So to appease him, we’ve decided to develop a process that will allow us to maintain order for our documents on a regular basis: we keep small coupon files, about the size of a checkbook but divided into different sections, in our purse or car (as the case may be). Each section is for a different type of receipt: business expenses, personal ATM and short term purchase items, long term or expensive purchases, etc. Once a month, we move the receipts from the little file folders into their permanent home in our filing cabinet. This way, we keep the receipts neatly categorized at all times, saving us the headache of ever having to sort through them all at once.