The future isn’t what it used to be – it seems a long time ago that pundits were predicting paper would soon be a thing of the past. Yet here we are, despite all the leaps and bounds in digital technology, surrounded by paperwork.
While there are no issues with switching to digital versions for most documents, some must remain on paper to be considered valid – things like documents that are notarised or carry a seal, or anything that has to bear signatures. But many professionals such as accountants, lawyers and insurance agents expect us to keep paper copies of other documents as well:
- Tax returns and any related paperwork should be kept for at least six years, according to the HMRC. Some exceptions apply, so check with your tax professional. Employment tax records should be kept for at least four years.
- Documentation relating to taxes/finances, employment, medical or insurance should be held for at least seven years. This applies to contracts, agreements and other legal documents, as well as bank and credit card statements. You should also keep receipts for large purchases, in case you’re asked to prove they were business related later.
- For your protection, you should have at least a scanned version of any other financial paperwork on file. The taxman can decide to examine your records whenever he wants, so it’s a good idea to have access to all the documentation required. So, in short, keep it all!
But that’s not to say we can’t manage the rest of our paperwork a bit more efficiently. Here are seven easy ways to help you cope with the proliferation of paper and pixels:
- Printer: We may want to save trees and reduce the waste sent to landfill, but every office still needs a printer for the occasions only original documents will do. Just make sure you choose one that is both energy and toner cartridge efficient, and only print what’s necessary
- Scanner: A scanner is essential for digitising paperwork for easy filing and reference. Take care to ensure you scan the whole document so no information gets lost, and that you scan both sides if necessary. You could also add password protection to electronic documents containing sensitive information.
- Filing systems: An efficient filing system will save you time, money and effort. Flat or vertical filing cabinets with alphabetised or color-coded folders will keep things orderly and easy to find. You can also use flash drives to share documents and files without printing them out.
- Digital camera: A digital camera – or the camera on your mobile – is a simple way to keep digital records of receipts and documents on the go. You won’t have to carry around a wallet or purse stuffed with receipts or have to sort through them to reclaim your expenses.
- Data storage: Any data stored on your business computer network or network-attached storage should also be backed-up to a separate hard drive or the cloud, so you can recover them if anything happens to your system.
- Shredder: Always scan then shred items containing financial information, account numbers and medical records. Even though you’re only required to retain hard-copy records for a set time before disposing of them, keeping a digital record may prove useful later.
- Lockbox or safe: For the documents you just have to keep on paper, invest in a safe or fireproof lockbox to keep them safe in the event of an accident or disaster. This is a good place to store your external hard drives too.
You may think spending this much time and money on keeping your files in order is overkill, but establishing these processes could help you speed up everyday office tasks and administration, as well as your year-end tax returns. Keeping important documents well-organised, scanned and easy to access should help reduce costs by making the tax process more efficient for your accountant.