Starting a business comes with a lot of paperwork. Registration, business license, insurance, business plans - it adds up. Include all the paperwork from your personal life, and if you’re not careful, that stack of paperwork on the side of your desk (or let’s be honest, the kitchen table) could end up in an avalanche on the floor. If you’re wondering how to best organize your paperwork, you’re not alone. We spoke to organizational expert Debbie White from Orderly Outcomes Consulting about what to keep, what to scan and what to shred to keep your sanity.
Paper or Digital?
Many of us have signed up to receive bills or statements online, which is great. If you have gone this route, save the files on your computer in an appropriately named file for the year. Even if you receive paper documents, like tax receipts, and you choose to scan them, keep the original paper copy as well. (We have tips on how to organize your paperwork below.)
If you’re more comfortable with paper, create a well-organized filing system that fits with your personal style. Binders are great for items like current project work or policy and procedure manuals. However, bank statements, credit card statements and receipts may be better stored in folders in a filing cabinet. White suggests that whatever system you choose, keep the files that you use most frequently nearby.
“It’s easier to have the folder or binder you require on a daily or weekly basis close at hand so that you don’t have to get up every time you need it.”
Get Organized
When organizing your paperwork, White suggests making four piles:
Act
File
Shred
Recycle or Trash
When you pick up each piece of paper, decide which pile it should go in. Once you have all the paper sorted into piles you can start taking action.
Whether you’ve gone digital or are sticking with paper (or a combination of the two), how you actually organize your paperwork is key. White explains that if you work out of a home office and use it to store your personal files as well, you may want to have two distinct areas to your filing system - Personal and Business. Create files under each category for the main types of documents you have, such as health records, credit card receipts, utilities, clients, professional organizations, volunteering, and so on.
Once your main categories are set up, you may choose to file things alphabetically. Whatever method you choose, “just ensure it’s easy to follow, that you will actually use it to file your documents, and that you are able to find what you’re looking for,” explains White.
What About Tax Documents?
Any documents relating to your taxes must be kept for six years, as per the Canada Revenue Agency. This includes both official receipts and supporting documents and applies to both personal and business taxes.
Even if you don’t have to include supporting documents with your tax return, keep the documents for six years in the event you get audited. You should also keep copies of your tax return, your notice of assessment, and any notices of reassessment. If you are unsure of what you should keep or toss, ask your accountant (or us!).
Toss and Shred!
There’s nothing more satisfying than feeding paper into a shredder and creating piles of confetti from documents you no longer need. But what should you shred and what can go straight into the recycling bin?
According to White, it’s best to shred anything that has personal information on it, like your name, birth date, address or SIN. As mentioned earlier, keep tax documents and supporting paperwork until the six-year mark has passed, then shred away. Documents such as property tax, investment or home maintenance records, or insurance documents should be kept.
Anything that has a date on it, and the date has passed can be shredded - think notes from your child’s school or past conference notices.
For other paper documents, ask yourself if you can find them online. If you shred a utility bill and need to reference it again, you can usually find it through your account online. The same goes for takeout menus - most restaurants have their menus online. Keep warranties and manuals only for things you still own. Many manuals can be found online as well, so do a quick search for your item and then get rid of the paper document.
Can’t decide if you can shred it? White suggests filing it away for now. When you do your yearly review and purge of documents (put it in your calendar!) you can revisit the item and you may have a better understanding if you need it or not.
Keeping Files Secure Online
You may loathe paper and have chosen to keep all of your files in digital copy. Have you thought about how you are keeping those files secure?
No matter where you store your digital files (Google Drive, Dropbox, your computer’s hard drive), it’s important to have a backup. Depending on your system, this can be an external hard drive or on the Cloud, or both.
If a document is very confidential, you may want to share it in a way other than by email. Document sharing via email is still very useful, but the security, efficiency and ease of sharing via Google Drive or Dropbox are advantageous. Also, everyone who has access to a particular file this way always has access to the latest version.
Make Organization a Habit
Paperwork can quickly pile up if you don’t make maintenance a habit. White recommends that you set aside some time on a regular basis to go through your inbox and desk to sort things out. This may be something you have to do every day if you receive a lot of paper. If you organize your paperwork on a regular basis, it won’t take very long and will keep things under control.