|
There are certain basic records you know you have to keep for a minimum number of years, but what about the many pieces of paper you DON'T need to keep?
|
 Time to clean up! | Once you know what you CAN get rid of, then it's easier to set up a system of record-keeping that doesn't creep up on you. Grab a trash can (or two) and get moving.
The first step to gaining control of the paper monster is to systematically divide your records into categories:
First Category: Discards. These include:
- ATM withdrawal receipts that you have recorded and reconciled
- Credit card receipts that you have reviewed
- Bank deposit slips that have been recorded and reconciled
- Old sales receipts for items that you have used or that have an expired warranty
- End-of-year records like pay stubs (keep the final stub and W-2 form or 1099 form), utility bills if not needed for business deductions, monthly mortgage and credit card statements, quarterly or monthly reports from mutual fund and brokerage companies from the previous year.
Second Category: Records to keep. These include:
- Seven-year keepers including W-2s and 1099s, final credit card statements
- Canceled checks and receipts for deductible business expenses such as professional dues, home-office equipment and entertainment
- Charitable donations
- Retirement account contributions
- Out-of-pocket medical expenses
- Child-care bills
- Mortgage-interest payments
- Property-tax payments
- Alimony payments
- Supporting documents for your tax returns, unless you have complicated issues
- Major purchase receipts for those items whose replacement cost exceeds the deductible on your homeowners' or renters' insurance
- Tax returns or the year-end summaries of investment accounts that can be used for future financial planning
- Home improvement receipts for potential home buyers and to reduce possible capital-gains taxes if you sell your home.
- Confirmation slips that show beneficiary designations and the purchase price of stocks, mutual funds, and any other investments in case you may need to know in the future how much you paid to determine the profit on your investment for tax purposes
You can find a detailed Records Retention Schedule on our website.
Secondly, designate a place to store and work with your documents. This can be a box, closet, cabinet or drawer with a table or desk nearby. Do yourself a favor and use a folder system with bold labels that you can easily read.
You can keep a simple alphabetical filing system or divide your files into categories such as goals (college, home purchase, retirement) or tax-related (including deductible business expenses, charitable contributions).
If you have a large number of files, you may want to record your liable names in a spreadsheet so you can find your files if you forget their names. The key here is to update your spreadsheet if you move, eliminate or add files to your system.
Keep your will, birth and marriage certificates, insurance policies, property deeds, and other permanent records in a safe but accessible place near your other financial documents, so you and your heirs will always be able to get to them quickly, if they need to.
The third step is to develop a system for your paperwork.
- Establish one place where you will immediately put all of your bills and papers when you receive them in the mail. This should be close to where you will pay your bills and do your filing.
- When a bill has been paid, discipline yourself to file it immediately instead of throwing it upon a pile of papers to "deal with later." Once that habit has been established, your paperwork challenges are licked.
The final step is to dig into your backlog. If you have massive amounts of paperwork to plow through, do a little bit at a time. You will feel SO GOOD about your organizational abilities at the end of this project, that you'll wonder what the fuss was about.
Oh. AND - If this article hasn't been enough to inspire you to bring order out of your paper chaos, you can find other document organization how-to's on the Internet.
| You can use these organizational tips in your personal or professional life. If you need assistance with cleaning up your business processes, review our Small Business Services. You may also contact Small Business Manager Jim Gante, CPA at 717-757-6999 or 800-745-8233, or send him an email by using the form below. |
|
Full Newsletter
