Running a small business should be systematic. As the owner, you should always be on top of things from purchasing your products, hiring and paying your employees, paying state dues and keeping customers satisfied. For every item that you transact in your business, keeping a record is a must. Storing vast binders and boxes of records can be overwhelming so you should know how to store them properly. These records will contain the very lifeline of your business. Here is how to keep your business records:
- Select good sturdy binders. Get sturdy binders that can handle at least 3 inches of paper. Be sure that the rings are made of stainless steel so they won’t rust even after a long time being stored. Wrap the binders with plastic so they would be protected from moisture or water.
- Pick a good dry place to store the records. Pick a room in your store premises and label it as “records room.” It may be a room or it may be a small place with lockable vault. The record room should be away from plumbing stub-outs or the pantry where there is a danger of contaminating the records with water or any moisture.
- Sort your records. The questions you should ask yourself when prioritizing keeping records are:
- How useful are these records to my business?
- How serious would be the consequences if I don’t keep them?
- How often will the state call on the business to produce these particular records?
- Does the business need these records to file for any reports required by the state?
- Can these records help me if there are any disputes with business partners or employees?
Once you have answered these questions, you should know which records to keep permanently or for a period of time. Those records that should be kept permanently are the following:
- Reports on audits
- Cancelled checks from business partners
- Cash books
- Capital bond records and stock records
- Soft copy or computer copies of the records (stored in disks)
- Business contracts
- Store leases that are current or are still covered.
- Business constitutions
- Bill of sales and mortgages
- Business permits and official receipts
- Business tax returns
- Financial statements
- Label your binders and boxes. It is important to label your binders so you won’t get lost in trying to find the record you need in the pile. Print out small labels and stick them properly under the plastic of each binder. If you are using document boxes, label them as well. Place each binder or box alphabetically on the metal racks or shelves to be organized.
- Keep your records updated. Be sure that your records are updated. If you have a full binder, use another one to bind the updated documents and store the full binder in the records room. The key to having an updated record files is to file the documents at the end of each closing time so you won’t forget them.
- Keep electronic files as duplicate files. It is a wise idea to store an electronic file of your business’s documents as well as hard copies. This will ensure that you have the documents in record even if your hard copies accidentally get lost or damaged.
Keeping an organized document record system for your small business will help keep you on track at all times. Before cleaning out old records, be sure to check with your lawyer and accountant about them.