6 Tips and Tricks On How To Store Accounting Records
Maintaining accurate and up-to-date accounting records is essential for small businesses. Not only do they help you keep track of your financial status, but they can also be used as evidence in the event of an audit. Here are a few accounting tips to keep in mind when storing accounting records.
Tip #1: Store Them In A Safe Place
These are so important to your business that you don't want them to be found, lost, or destroyed. To stop these outcomes from occurring, you'll need to put them in a place that is:
Waterproof
Fireproof
Locked Away
A good option would be a safe. This ensures that no water or fire will damage the papers and that the only people capable of entering the safe either have the passcode or the key.
Tip #2: Organize Them
Organize your records by type and date. The process might take time, but you will make it easier for yourself in the future to find what you need when you need it. Here is a list of different record types to keep track of:
Gross Receipts
Purchases
Expenses
Travel, Transportation, Entertainment, and Gift Expenses
Assets
Employment Taxes
Tip #3: Make Copies
Don't forget to make copies! While a waterproof and fireproof safe will keep your original record secure, it doesn't hurt to have a backup. You can make these copies physical or digital, but the most important part of this tip is that you keep them stored in a separate location.
Tip #4: Store Your Digital Records, Too
Your digital records need to be stored in a secure location just like your physical records. So here are two places we recommend:
A password-protected computer
An external hard drive
And an added step to storing your digital records would be to back up your files regularly so you can prevent data loss.
Tip #5: Destroy Old Records
This tip will keep you from feeling overwhelmed every time you look at your records. You don't want to keep anything that you won't need - that would just create clutter and disorganization. So make sure you're destroying old records and make sure you are destroying them in a secure manner.
This means that the documents should either be shredded or burned. These are the best ways to ensure that they cannot be accessed by anyone else.
Tip #6: Hire An Accountant
We're at the final tip: hire an accountant. If you are not comfortable storing and organizing your own records, they will do it for you. They will also have the knowledge and experience that is needed to keep important documents stored and maintained.
And that brings us to the end of the blog. Follow these tips to make your job a whole lot easier (especially around tax season). You will definitely benefit from it.
For more information on how we can help you with your accounting, click the button below to schedule a free consultation with tax professional and business owner Katishia.