In my past life as a professional organizer, I helped many entrepreneurs organize office paper. It’s no surprise that an organized space sets your business up for success. So if you’re overlooking mounds of paper piles, you may feel out of control and overwhelmed. And it won’t be long before your disorganization will begin to show up in your lack of business results.
Disorganized entrepreneurs, unfortunately, are a common occurrence. And now that everyone is working from home, we all feel the need for more space. It may feel as if you have no time to organize. And while it does take time, the task will pay you back in time saved, every time.
An organized office and well-managed, labeled files will help you to feel more control, be more productive,
and create better business results.
That said, here is a fact:
Most people keep WAY more paper than they ever need.
So – how does an entrepreneur get it together? How can you get your office in order and get organized in the easiest way possible?
Golden Rule of Paper Filing
Only keep what you cannot replicate, produce, or find elsewhere.
According to the great Barbara Hemphill, paper piles (or rather piles of any substance) are simply postponed decisions… In other words, instead of taking the time to DECIDE what should happen with a paper in the first place, many people postpone that decision and place it down wherever it’s convenient to drop it. Soon, you’ll have several of those items and suddenly, they’ll collect themselves together into a pile. It can seem like the entire world is out to get you when piles begin popping up everywhere.
If this is your world, it’s time to get a grip, relax, set aside some time, and start deciding. Ruthless decision-making is the backbone of getting and staying organized.
The biggest reason that paper piles haunt entrepreneurs, in particular, is that most people don’t know the difference between the files they must keep (for legal reasons), those that are nice to have, and those that are redundant and can be found elsewhere.
According to the IRS, the length of time you should keep a document depends on the action, expense, or event the document records.
Generally, you must keep any records that support an item of income or deductions on a tax return until the period of limitations for that return runs out.
Almost every other paper is optional.
How To Organize Your Paper Files
The following guidelines will help you organize your office, purge unnecessary paper, and then label the paper files you must keep.
Records You MUST Keep fall into these categories:
Organize Permanent and Vital Files
When you endeavor to organize your office, you must identify legal and vital files first. These are items you must legally keep to establish yourself or your business in case of emergency or loss. Legal records that establish business boundaries contracts or agreements fall into this category. There are 8 critical files you must set up to make your office work. Additionally, office organizing systems like Portavault help you compile Vital files together. You can check it out here!
Create Rotating (Remove/Replace) Files
To avoid overstuffed file drawers, create rotating files. These help you sort and update cyclical files while keeping the most recent year on hand. Insurance policies, for instance, change annually and must be kept up to date.
One of my favorite all-time filing systems is created by Freedom Filer. This system simplifies filing using color-coded file labels. Files are easily rotated and sorted by even and odd years.
Active Files/Action Files
These are papers that are placed in files labeled with the ‘Actions’ you repeatedly take to manage your papers such as: Pay, Call, Follow Up, Write, Read.
Remember, you need to find your information so it’s important to label files with naming systems that make the most sense to you. If you know you think differently, just ignore traditional file names if they don’t work for you. Your brain will typically resonate with what is natural to you and your style.
Organize Tax Files
Your record-keeping system should align with your business and should clearly track your income, expenses, and a summary of your business transactions. This summary is ordinarily made in your business books (for example, accounting journals and ledgers). Your books must show your gross income, as well as your deductions and credits. Set yourself up to systematize all the records you need to keep and produce at tax time. For more see IRS.gov.
This refers to records and papers you MUST keep from your past business. Data file archiving is used to free up memory and space on primary data devices. It is a good idea to archive your past files to secondary or tertiary storage, to allow for data storage and growth in an organization. Click here for more guidelines on archiving.
Resource files are any papers or information you can’t replace or find elsewhere to which you refer often. Recent trends show small business owners to be relocating items once tucked away in ‘resource files’ to cloud computing and virtual applications. My two favorite tools to use for storing your resource files such as phone lists, menus, collaborators, contractors, etc. are Evernote, Google Drive, and Dropbox.
As always, when deciding about which office papers to keep, it’s important to check with your tax advisor or the IRS for your own security and protection. For more information, consider downloading my e-Book “Time To Toss It” available here for $2.99!
What are some best practices you use to you organize your office files?
Please share your entrepreneur filing secrets and best secrets in the comment box below!