Operating You, Inc.: Manage Records

~ Records Management/Filing System

Invoices, balance sheets, reports, checks, letters, sales brochures, payment reminder letters, notes, discussion notes, project plans... hold it. We're self-employed here not in the business of setting up a library. Right? The truth is that there is enough documentation going around with any self-employed business that one does need to arrange everything or get smothered in a completely jumbled mess. Also, organizing documents is important because we have to deal with a mix of traditional paper documents and electronic files.
Good documentation management certainly means increased productivity. With orderly document management, you don't waste time and you always have your accounts, important communication, returns, etc. all there when you need them.

Important questions to ask before you set up your own document management system - both for e-files and paper documents

  • Who will handle my document management system? Do I really need to hire someone or can I use good tools to handle it efficiently by myself?

  • What is going to be my basic document template/in-house style guide? Time-stamping, date stamping, levels of document sharing, etc. Where would the more confidential documents go?

  • How would the documents be filed and archived? Should I go for storage in alphabetical, subject-wise or date-wise storage? Which documents would be accessed more often than others?

  • What is the physical or electronic space available to me? Is it sufficient?

Physical storage of documents
For physical storage of documents you won't have much problem finding regular folders, cabinets, etc. Try color coding if you are creatively inclined. Don't go for fancy trappings but focus on utility and ease of use when buying stationery or cabinets for physical storage of documents. Ensure a stock of labels to keep everything organized.

E-storage of your documents
There are several great software products that you could utilize for e-storage of documents. Before we discuss these products, here are some tips for proper storage of e-documents.

  • Organize file types

  • Make full use of nesting folders like all folders for each month of year 2011 go into one folder marked 2011 with a folder for each month. You could try folders for a financial year instead of the calendar year.

  • Follow file-naming rules like no spaces in file names, 27 characters etc. and be specific about names. No point having a folder marked 'confidential'. Use a password instead but call the password something that you could easily recall it when required.

  • BACKUP properly.

  • Sort and cull your folders often – both for physical records and e-records

You will find details on the document management software in the Productivity Tools section.

What records to keep (list of files/folders)
Here is a list of records for you to start with. Prepare a folder for each and store the documents with an index that makes sense (date, client name etc). As your business grows, you may need additional categories as necessary. My suggestion is to store digitized copies of the records where possible. They take less space are easy to find, i.e., if organized properly. The paperless office is not just environment friendly; but also cost effective for your business. Note that the folders I mention here can be physical folders or folders on your computer. Interpret them as appropriate in your case.

  • Legal documents
    Use this folder to store records and documents related to business incorporation, license and registration, article of organization etc.

  • Marketing Collaterals
    Depending on the type of business you are in, you should have marketing material that explains your business’ value proposition. For example, collaterals for a consulting business may include its capability statement and case studies.

  • Proposals
    You may have one folder for all proposals you send to prospective clients, or separate folders for each client.

  • Client Related
    When a prospect becomes a paid client, you should absolutely create a separate folder for that client. All communications, including client contracts, invoices etc. should be in this folder

  • Bills
    Most of companies now offer Electronic Bill (E-Bill) option. Sign up for that when available. In the rare occasions where you receive a paper bill, after you make the payment, mark it as paid and file it in this folder.
    You should also use the online bill pay option to pay the bills. Many banking institutions offer this as a free service or at a very nominal fee. They are awesome; your bank either does a direct transfer to your payee account, or prints and mails a check to them. Also, usually, the bank is responsible if the payment doesn’t reach the payee on your instructed time.

  • Tax documents
    Prepare a separate folder for your tax documents, such as tax returns and communications with IRS and State & local Tax departments.
    In addition to these, prepare additional folders for documents that you feel you need to retain.

How long to retain

  • Tax related documents - six years or longer

  • Contracts and legal documents - for ever

  • Others - judgment call (better to keep a digitized copy if destructing the paper document)

Tips: When getting rid of documents, don’t just throw them into the recycle bin. Make sure you shred the ones that have confidential or personal information.


Be Productive