According to a report issued by Babson College and Baruch College in 2013, the percentage of adults involved in startups or entrepreneurial projects reached a record high of 13 percent. The last two years have seen a sustained growth in this trend, with many of those starting new businesses doing it by having a drive for new opportunities instead of the commonly assumed premise of entrepreneurialism through necessity. If you are among this rising segment of the population, then you have probably discovered that the lines between your personal finances and your entrepreneurial endeavors are quite blurred, making careful record-keeping a must. This comes in addition to the many hats you are likely to wear as a new business owner. As the ultimate generalists, entrepreneurs are likely to handle affairs from accounting to payroll, and many more document-intensive tasks. If you are in this boat, then we want to share with you basic guidelines to help you store and organize the documents that matter the most.
Make Document Management a Priority
With so many things on the to-do list of an entrepreneur, oftentimes document management ends up being neglected or deprioritized, with tasks that have a more direct impact on revenues taking center stage. By neglecting the day-to-day management of paperwork, you are placing your business at risk. Poor paper trails can increase liability, leave businesses without the necessary data to make informed decisions, and delay processes that are document-dependent for key customers. We get it. Paperwork will not give you the thrill of the hunt, nor give you the satisfaction that comes from hustling, but believe us when we tell you that doing a little now will save you from serious conundrums later.
There are plenty of free tools available to help you manage the avalanche of paperwork and digital files that will come your way. Be calendar-driven and practical in how you manage the document flow. Keep a box to store printed material that needs to be tackled, and make it a point to scan it for digital storage. Ten minutes a day of managing printed and digital documents can make a significant difference when it comes to remaining accountable and staying on track.
Create Your System for Grouping and Archiving
Having a system matters more than you will ever know. What value does a document have, after all, if you are unable to quickly locate it when needed? Consider tagging and archiving your documents by category and date, making sure that you are consistent in the file-naming system you select. Proper grouping and archiving will save you time and headaches from having to dig through all your digital files when you are in need of a particular document.
Think About Future Funding
When storing both digital and non-digital documents, think about the paper trail that will tell your story, should you ever need to seek funding from investors or approach a bank for a loan. We are not talking exclusively about financial documents, but also correspondence and communications that prove diligence and expertise, as well as accolades given by others that attest to your ability to deliver the goods.
Think About Taxes
As a startup, you may not have the luxury of a dedicated accounting team. Keeping track of expenses, payroll-related matters, and other paperwork that will satisfy the Internal Revenue Service is key to the success of your business. Make it a point to stay on top of your tax-related documents. This is possibly the most sensitive area of record-keeping when it comes to new businesses. Take a closer look at best practices for tax document storage.
Create a special file to keep documents that are relevant to your legal responsibilities. This includes insurance documents, incorporation documents, and paperwork that proves you have taken the necessary steps to protect the health and safety of your customers. For example, if you are a restaurant, then it is very important that you keep and display evidence of health inspections and food-handling certifications.
Think About Marketing
If you have received positive press or private accolades from your customers, then you may want to keep track of those. Including customer or press testimonials is highly effective when creating marketing collateral.
Think About Continuity and Transferability
Take a moment to consider what would happen to your client portfolio if you become ill, incapacitated, or you pass away. Having your important documents stored in a way that is transferable and allows for continuity is essential for small and large businesses alike.
Think About Safety and Privacy
Many of the documents you store in association with your business are sensitive and private in nature. When deciding how to store documents, consider safety and privacy, both in the digital realm and offline storage.