The Small Business Owner's Guide to Setting Up an Effective Filing System
As a small business owner, you are a unique part of the work force. Whether you like it or not, you must familiarise yourself with a number of different professions – including administration and accounting – in order to keep the business running.
Proper administrative practices include developing an effective, highly functional record keeping system. Every aspect of business needs to be recorded, from finances to business transactions to meeting minutes. Over time, as more and more files build up, a lack of a proper filing system can make it far too easy to lose important information.
Luckily, setting up an effective, logical filing system is a fairly straightforward process. Just keep a few things in mind…
Set Up Clear Categories
'Clear' categories are, in essence, categories which have zero ambiguity to them. No item should be able to fit into more than one category, making it that much easier to find the item later.
A good way to do this is to divide all business records into several broad areas. Accounts payable, accounts receivable, ongoing work, completed work, in-house affairs, employee records, etc.
Each category should have its own drawer, or even its own cabinet (from companies like Design Systems Office Interiors Pty Ltd), depending on the number of records. That way, you know exactly where to look if you need to re-issue an invoice or look over an employee's insurance situation. Within each category, records should be arranged by date.
The idea of this is to allow you to find whatever file you are looking for in 20 seconds or less.
Keep Relevant Files Close
This is a simple tip. Keep files that you currently need, projects that you are working on, close enough to your desk or place of work that you can reach them without moving too far. Closed accounts and old files – ones that are unlikely to be called on for some time – should be kept further away to avoid clutter.
Make Sure Your System is Transferable
There will come a time, as your business grows, that you will need to hire an accountant, and an administrative assistant. If your system is so complicated that only you are capable of understanding how it works, it will be incredibly difficult to transfer duties over to your employees. Make sure you can easily teach your system to anyone.
Decide on a Purging System
The fact is, not every record needs to be kept permanently. Business transactions, by law, need to be kept for a minimum of 5 years. However, there will certainly be files that you feel become obsolete and unnecessary to hold on to.
In such cases, decide on a way to get rid of them. Destruction of business files should always be complete (like a paper shredder), particularly files containing employee's personal information.