How to Maintain Financial Records and Accounts

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A great way to reduce stress in your life is to know how to properly maintain financial records and accounts. You will not have to spend hours looking for a receipt to prove that an office machine or appliance is still under warranty, nor days gathering the financial paperwork to file your business or personal taxes. Now you can spend that time productively as you work toward success. Organize your records and accounts with a streamlined system that covers both virtual and traditional filing.

Things You'll Need

  • Filing cabinet
  • File folders
  • Colored stickers
  • External hard drive
  • Open Office or spreadsheet program
  • Photocopier
  • Label all folders, both paper and virtual, with clear and concise names. For example, you would not label a folder as simply Utility Bills and throw everything in loose, but rather make individual folders labeled Gas/Electric 2010, Telephone 2010, Water 2010 and Cable 2010 and them place those folders inside the Utility Bills folder. This is easy to do in Microsoft Windows by clicking on the new folder icon, giving it the name Utility Bills, and then creating the individual folders within Utility Bills.

  • Review your paperwork after you have organized the folders. Toss anything that you no longer need and then file the papers in date order with the most recent papers in the front of the folder.

  • Put a colored sticker on the tab of folders that have tax-deductible receipts so you will know at a glance which folders to pull from the drawer. An alternate method would be to make a photocopy of the receipts and put them in a folder for that purpose. You could also keep a spreadsheet on the computer for this purpose. Open Office is a free complete office suite that does spreadsheets and charts as simple or as complicated as you need.

  • Back up all virtual records regularly to an external hard drive. Anything from computer viruses to lightning strikes can damage your main computer. An external hard drive that you have kept updated will have you up and running with minimal data loss.

  • Update your list of important contacts. Include the people who help you to run your business, like your partners, lawyer, payroll bookkeeper, tax accountant and the insurance company. If you are an individual, include information that your loved ones would need in an emergency so they can pay your bills, access any necessary legal documents and take care of things for you.

  • Make an inventory of your possessions. An inventory helps businesses to depreciate equipment, which helps to lower taxes. Use the inventory with the insurance adjuster if there should be a claim of theft or damage. Remember to include collections that you may have such as vintage tools or books.

  • Make a photocopy of important financial papers such as stocks and bonds, mortgages and deeds, credit card account numbers, savings account information, savings bonds and insurance policies. Keep these separate from the originals so you can quickly access them if the originals should be lost or stolen. This will allow you to put an immediate freeze on your accounts before someone can clean them out.

Tips & Warnings

  • You may find it helpful (at tax time) to make a master list of all your virtual folder names and put a printout in the filing cabinet.

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References

  • Photo Credit hanging files image by Willee Cole from Fotolia.com
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