Best Filing Practice for Small Business Owner

An effective and efficient filing system is not about compliance only, it also increase your time management efficiency and productivity. Following principal will help business owners to develop the proper filing system for themselves.

1. Analyse your needs

• What are the files? Invoices, bills, receipts, quotations, marketing material, projects or general business administration related;
  
• Who will use the files? Just yourself, or you need to collaborate with your partners, bookkeepers.
  
• How often are they used? Daily, once off, on-going; Separate files by type: current working files or permanent storage or archival files
  
• What is the size of the files? A4 - into normal folders; smaller one - into plastic pouches or envelopes
  

2. Sequence of files

• Before analysing your files, documents are generally arranged in following sequence:
  
• Alphabetically – good for client/customer files, bills from different suppliers; 
  
• Chronological – good for matters with time sequence, like computer backup files or dated files;
  
• Geographical – good for business with distinct geographical focus;
  
• Numerical – good for numbered files, like invoice, order, bills, most files compliance related files are numbered; 
  
• Subject – good for sub-folders, like different projects for same customer; 
  

3. Setup working area based on file type and workflow;
There are generally two types of files: working files in your working area and storage/archival files in your storage/archival area; Working files require frequent action and regular visit. Organizing files by following types and making good use of file separators, dividers, organizers and drawers will assist your working area productivity:

• General items (not files, but they are essential to working area.): pen, stamps, clippers, staples, all those stationery and various items;
  
• Sales invoices: separate unpaid and paid invoice as two sections in numerical sequence: invoice numbers; 
  
• Purchase bills: unpaid and paid bills from different suppliers in alphabetical sequence; bills will be moved into storage area once paid; 
  
• Receipts: cash receipts/credit card receipts, will be summarized and attached to each month or each quarter’s summary; Each summary is organized in chronological sequence; A separate receipts folder should be a good choice; 
  
• Quotations: after quote is accepted, transfer to either project or invoice;
  
• Orders: keep track of ongoing/open orders;
  
• Projects: put together projects related files;
  
• Marketing material: marketing campaign and promotion’s planning, execution and review; 
  

4. Setup storage/archival area based on file type and workflow
After working files are finalized or action is completed, they are moved into storage/archival area. When moving working files to storage, analysis and purging are required, generally, invoices, bills and receipts have to be moved to storage area for compliance purpose, other files are only stored when contains quality information and worth storing.

• Sales invoice folder: paid invoice in numerical sequence
  
• Purchase bills: paid bills in alphabetical sequence by suppliers, which can start as one folders from A to Z and expand according to your needs; Bills can also be separated based on types, like material purchase, utility bills, insurance, etc to assist your daily usage, you can separately store files like insurance or utility bills for easy trackback;
  
• Receipts: cash/credit card receipts with monthly or quarterly summaries are moved into storage area once finalised; 
  
• Quotations, orders, projects and marketing material: only store files with real value and they will be revisited in the future;
  
• Separately store compliance required files and other files;
  
• Revisit schedule: check and purge non-compliance related files on storage every half year or year; Purge compliance required files after 5 or 7 years; 
  

5. Estimate your storage needs
How big is your working area?
How big is your storage area?
Do you need to access your files daily, weekly?
After you have these answers, you will figure out the best combination to setup your physical needs:

• Desktop file divider / drawer plus bookshelf cabinets with folders
  
• Desktop file divider / drawer plus two/three/four drawer file cabinet with suspension folders
  

6. Purchase folders, dividers, separators and storage items
There are various folders and storage items on market, the best way is to keep your needs in mind and walk into the stationery store and choose the items fit you:

• Coloured suspension folders with plastic label tabs and also the paper inserts;
  
• A4 manilla folders with tube clips;
  
• Board lever arch A4 file folder in different colour with color dividers or A to Z dividers;
  
• Plastic pouches for small receipts or other sized files;
  
• Multi-layer file organizer;
  
• Drawer cabinet with (coloured) suspension file folder and label tab;
  
• Shelf cabinet combining with board lever arch folder;
  

Build your filing practice, form your routine and control your files. A good filing system is essential to your success as one entrepreneur. Easy filing!

---