How To Give Your Business and Tax Records a Spring Cleaning

A big source of clutter might be your reluctance to toss out old documents, whether they’re bank and investment statements, invoices, contracts, or receipts. You certainly don’t want to throw away something you may need in case of a tax audit or customer inquiry.

The Internal Revenue Service (IRS) offers guidance on how long to keep various business tax-related records, and your tax adviser can also give their opinion. Beyond tax records, though, you may want to keep key documents — such as current business contracts and property purchase records — indefinitely or until those items are no longer relevant.

You can often discard receipts for items that you’re not expensing on your taxes once the warranty has expired and you’ve confirmed that you were billed correctly. When you’re sure a document can be discarded, you can use a paper shredder to make sure confidential information doesn’t get into the wrong hands.

Consider that many financial institutions and credit card companies keep electronic records like bank statements so you can retrieve them in the future.

Document management software and mobile apps can help you efficiently store electronic records. Several apps allow you to use your smartphone to snap a photo of receipts and organize them on the go. Some subscription services even provide the equipment to scan paper documents and turn them into digital, cloud-stored files, so you don’t have to keep them on your computer’s hard drive.

You can also set up a similar system by buying a scanner and storing your records on a cloud service like Google Drive. Once you scan and save a document, you should be able to discard the paper document.

Rather than having to revisit your clutter every year — or whenever the papers pile up on your desk — consider developing an organizational system. Perhaps once a week or on the last Friday of every month, you can file your recent documents in a file cabinet or discard them accordingly.

Of course, organizing your office goes beyond just tax records and business receipts. You have emails, voicemails, social media accounts, and your bookkeeping. Figuring out a system for keeping those organized can help you tackle clutter and boost productivity.

You might also want to implement a color-coding system for your files and folders. Using solid color labels, binders, or folders, assign different colors to different documents (such as blue for tax records, green for invoices, and red for contracts). This visual system allows for quicker identification and retrieval of documents. It also adds an extra layer of organization, making it easier to notice if a document is misplaced.