Financial Paperwork | Money Systems | Bookkeeping | QuickBooks| Money | Finances | Small Business | Saving | Accounting | Self-Employed EntrepreneurThe paperless office. You’ve heard about it. You’ve dreamed about it. Hell, you’ve even TRIED to start it. But there are SO many options and you just don’t have time to figure out the best way to get your paperwork in order. So instead of organizing your financial docs, you’re DROWNING in them.

Friends! Not only is there a better way but there’s a better way for YOU because there isn’t a one size fit all solution to digitizing your financial docs.

Let’s talk about digital document management for your finances! I’m showing you 3 methods for getting your docs digitally organized and giving some key questions to ask yourself to decide which method is right for you.

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Types of Financial Documents (4:36)

Before we dive into HOW to organize our financial documents, let’s talk about WHAT we’re going to organize in our biz finance systems.

You guessed it. First, we have receipts. You may have some stored away in your wallet, at the bottom of shopping bags or even lurking in your coat pockets. Then there are bills that you receive physically in the mail, check stubs for checks you write and receive, and let’s not forget about ATM receipts! 

Oh and all the paperwork that you receive from your bank, like monthly statements as well as interest statements. And of course tax documents that come flooding in every January!

Digital documents may be the contracts that you send or receive each month, receipts from online orders, and notifications of recurring expenses you’ve paid.

Here are your physical documents:

  • Bills received
  • Receipts for purchases
  • Check stubs
  • Charitable contribution receipts
  • Bank statements
  • Tax paperwork

Here are your digital documents:

  • Bills received
  • Receipts for purchases
  • Bank statements
  • Recurring billing notifications
  • Tax paperwork


Now that we have identified the different types of documents, how the hell do we organize all this stuff?! The most overwhelming part of financial document management is figuring out how to put two types of documents into one system.

What’s your tolerance for what you need to keep?

The first step is clarifying what your tolerance level is. Here’s what I mean: are you somebody that keeps every single document related to your business finances, or are you the person that deletes almost everything because you don’t think you need it? (psssst- find out what you really *need* to keep here)

Knowing where you stand in this range will help you decide which method is best for you. Some of these methods are better for people who want to keep everything and some of these methods are better for people who are more liberal about what they toss.

Also, if you co-own a business, have investors or partners, or work with a bookkeeper, you’ll likely need to keep more documents than if you’re a single business owner DIYing your bookkeeping. 

Take time to reflect on what your preferences are before you dive into these methods.

organize business finances

Cloud Based Folders (11:15)

The first method for document management the simplest: Cloud-based folders. I consider cloud-based folders the starter version of digital document management. It’s best for people who have more simple business models and minimal spending.

One reason I advocate for cloud based instead of saving documents on your computer is that we all know the horror of having our hard drive crash. Even if you’ve never had your hard drive crash, you’ve probably had a time where you thought your hard drive was going to crash. And it’s legit like Chucky coming after you with a butcher knife. 

But if you use a Cloud based system, then you’ll never have to worry about losing your most important documents!

This method is all about creating a folder system that organizes your financial documents. If they’re physical documents, you’ll scan or take a photo of them. If they’re digital, you’ll save them as a PDF.

This is NOT a grand concept. We’re literally just talking about making and labeling folders. That’s a pro- it’s super easy!

The con is that this method is more labor intensive because there’s a lot of scanning and uploading documents. Unless you hire somebody to do the work for you, you’re in charge of updating your financial folders. You have to stay accountable toward utilizing the system because there’s no automation.

If you want to see how I organize my financial documents in Google Drive, take a peek at my screen share demo at timestamp 15:36 in the video. You can watch the video and see exactly how I organize my digital folders. 

Next, I want to cover some quick tips if you decide to go with the Cloud based folder method:

  • Organize the folders by year. Otherwise, you’ll waste a lot of time searching for documents.
  • Create a template folder and copy a new one every year. That way, you’ll only have to do the set up work once.
  • Build scanning into your bookkeeping routine so you don’t forget to include your physical documents! Put those documents in a secure place and upload them all at once.


Is this the right method for you?

It is as long as you have minimal spending and expenses that you need to track. This system takes some maintenance. If you have more than 50 transactions it’s better to look for something with more automation. 

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Attachments In Bookkeeping Program (25:41)

The second method is attachments in your bookkeeping program, which is means integrating your document management system in your bookkeeping. 

The way that this works is that every receipt, bill, or invoice gets attached to an expense in your bookkeeping program.

The cloud-based folder system is an external organizational system. The attachment method is an internal solution. You still need to scan your physical documents onto your computer and save your digital documents as PDFs. Then, you’ll add each of these documents as an attachment to the corresponding income or expense that is in your bookkeeping program.

You can watch how I use this system at 28:48 in the video. I highly recommend that you watch this portion because it will help you understand this method on a different level.

Most people don’t know that this is an option in Quickbooks Online and it’s super easy!

Let’s talk pros and the cons. The pro is that it’s a contained system and you’re not dealing with disparate filing systems. If you need full transparency within your bookkeeping program then this is a great system. It’s perfect if you’re sharing your business with somebody because your business partner or bookkeeper can see exactly what you spent.

The biggest con is that you need to use a bookkeeping system that has this functionality. If your current system doesn’t have this functionality, then it would take a lot of effort to switch everything over just to use this system.

Let’s go over some of my quick tips regarding this method:

  • Every receipt, bill, invoice, or notice gets attached to an expense in your bookkeeping
  • Add documents as attachments after you’ve processed them in the browser, which is easier than trying to upload photos of receipts from your phone and type in the info on those tiny horrible keyboards. 

Is this the right method for you?

Are you already using a bookkeeping program to support this? Because if you’re not, this is probably not the right system for you.

This method works best for people who don’t want to keep every single thing. I personally don’t feel the need to keep all of my bank statements because I can download them later. For me, this system works because what I DO want to keep are records related to my income and expense patterns.

Do you need to share your financial information with a partner, investors, or with a bookkeeper? Do you need to have that type of transparency? If you do, this is a better method than the foldering system.

Paid Document Management Apps (37:39)

Now to the third and final system- which is the automated one! This is the only method that isn’t free, so you’ll want to consider ROI regarding your time.

How long are you spending organizing your documents? If it’s five minutes a week, you don’t need something like this. If it’s several hours a week then this system should be a serious consideration.

This system also is best if you employees with company credit cards giving you a bunch of paper receipts or reimbursement receipts. This solution is appropriate for people who have larger, more complex business.

There’s one app that I’m going to focus on regarding this method called Hubdoc, and it costs $20 per month. It is a document management system specifically geared towards financial records.

There are three ways that your documents get into the system: auto import, using the mobile app, and emailing receipts directly from your inbox.

The auto-import connects to your banks, credit cards, and major service providers and downloads your bills automatically to the system. The mobile app allows you to add physical receipts and documents from your phone and the email method allows you to forward email receipts to the system.

I show you how this method works in more detail at timestamp 45:12 in the video. 

This is a good way to protect your financial privacy while also sharing the necessary documents that you need. Hubdoc also syncs with QuickBooks Online, Xero, Google Docs, Dropbox, Box and more- which means sharing your data is easy and secure. 

Is this the right method for you?

First of all, who do you need to share your data with? How many people are spending money in your business? Do you have employees that use business credit cards? Do you need to share your documents with your accountants, bookkeepers, or business partners? 

This system is best for people that need to or want to keep every single document, especially because this system makes it EASY to keep every single document. It does most of the back-end work for you, which means if you’re not good at keeping up with things, this system will be a lifesaver. 

We talked so much about how to organize your documents but we what documents should you keep and how long should you keep them? Download my free should I keep it cheat sheet so you don’t overwhelm yourself and your business with paper clutter. And let me know in the comments- what system are you going to try out?

 

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