Paper Management Help
If you are one of those who can’t seem to get papers into a file, don’t panic because you need to get your papers in order for tax purposes. Here’s a simple system to handle paper clutter this year and to continue for many more. This system is suited for owners who travel to business appointments in their vehicles.
Everyone thinks differently about handling paper. Ask yourself what you dislike most about paper management. Is it the filing? Is it the difficulty of deciding what to label the file? Is it a time issue? Are you overwhelmed with the volume of papers you need to handle? Do you find receipts on your dashboard, in your pants pockets after they have been laundered, or stuff in your wallet? Determine what the blockage is before you proceed.
Place a container that you can close in your vehicle to place all your invoices and receipts. Your papers won’t get dropped on the floor, fly out the window or get drenched from the soda you accidentally spilled. To be even more organized and save you more time, carry an expandable file. This way you can slip the piece of paper right into the proper slot immediately. Label them, gas, postage, supplies, etc., (in alphabetical order, of course). This list should match the Schedule C, 1099 MISC IRS form. That really simplifies what paper goes under each category.
When you arrive back at your office/home office, simply enter the information into your spreadsheet, QuickBooks or whatever software you are using. Depending on your volume of papers, you may want to transfer the papers to larger files in your file cabinet with the identical labels. Then there is no confusion. If you are not a detailed person or very busy, seriously consider hiring a bookkeeper. Pass along all your receipts to your bookkeeper once a week to accurately enter into your files and ledger. Outsourcing or delegating tasks that consume your time helps increase your productivity.
Not all your records will be hard copy. Some will be electronic. I purchase my copier ink cartridges online, for example, and receive a receipt in my email. I print out a copy because that is my preference. I also save the file in a folder labeled “receipts” so I can easily retrieve it.
Remember to keep good records of your mileage. Some people can deduct the expenses of an in-home office. Follow the IRS guidelines carefully. Every little bit helps to reduce your tax burden. At the end of the year, all your documentation is together. Your amounts are entered and preparing your taxes is simplified.