Have you ever had a pile of papers that defied being labeled? Or perhaps you’re worried that if you do file that important piece of paper, you’ll never find it again in your cavernous filing system. Yet some people seem to be able to put their hands on any piece of paper they are looking for within seconds. So what are their secrets?
Tip #1: Create one overall system and stick to it. If you forget what categories you have in your filing system, create an index so you can scan the index to file and find items.
Tip #2: Create a hierachy of categories and file either alphabetically or chronologically within each main category. Main categories may be financial, clients, business entity, reference, and so on. You may choose to file the financial documents chronologically and clients alphabetically. There are no hard and fast rules – as long as you stick to your decision.
Tip #3: Make it easy to distinguish between main categories using location or color, or a combination of both. Your financial files could be in the top filing drawer in the green folders and your client files in the bottom drawer in the orange folders.
Tip #4: Where ever possible, set up your system to self purge. Make it easy to purge old tax supporting documentation by filing by year. Make it easy to purge items that you only need the most current version of by having a one in, one out rule for those items. Be sure to keep any permanent files separate, but archive old items appropriately in order to keep the main files easy to use. Freedom Filer (link with id to freedom filer page: https://freedomfiler.com/AffiliateClickThrough.cfm?cid=1217) has a great system for home and home business needs.
Tip #5: Label your hanging folders by both the main category and the sub-category, e.g. Financial – Investments. Label your manilla folders with both the main category, the sub-category and the sub-sub category, e.g. Financial – Investments – Schwab. That way, it is easy to know where to put your manila folder back in it’s hanging folder home.
Above all, be consistent. File regularly and you won’t have big piles accumulating. Of course the next option is to go paperless and scan – but that’s another topic!
