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To whet your appetite, here are a few strategies from our Virtual CFO team.


Organize Your Office

Lack of office organization is perhaps the most expensive yet easily corrected problem you face. Organizing the paper flow in your office will not solve very many business problems, however it will make it easier for you to see and solve them.

It is the one thing you can do right now that will lower your stress, increase your control, and eliminate some of the frightening waste that robs you of time, profits and cash flow.

So how do you go about it?

First you need to establish a structure and a strategy for solving the messy office problem.

The structure will rely on filing systems; so let's begin with a little discussion about the strategy of filing systems.

Filing Systems

The purpose of any filing system is to create a logical organization that makes it easy to retrieve data when you need it but keeps it well out of the way when you don't.

A good filing system will have the following characteristics:

Bullet 1 It will be logical.

Bullet 2 It will be organized.

Bullet 3 It will allow you to easily find anything you are looking for.

Bullet 4 It will be easy to maintain.

All right, let's begin to organize the paperwork and clutter that is probably stacked all around you. Here are the files that you will need:

Bullet 1 Administration manual. This really isn't a file in the traditional sense, but it is more of a manual, a loose-leaf binder where you record key information about the business. Sections of the manual might include:
  1. Tax numbers
  2. Incorporation data
  3. Credit information for filling out credit applications
  4. Chart of accounts
  5. Company policies
  6. System information
  7. Employee contact information
  8. Key contacts (attorney, accountants, advertising advisors, consultants, insurance agents, etc.)
In short, you put things in this manual that you need to access over and over again. This is information that doesn't constantly change and that you want at your fingertips.

Bullet 2 Garbage Can. You will use this "Round File" for everything that you clearly know will never have any use in the future. Be ruthless in the use of the garbage can. Old books and magazines that you know you won't use, old papers and wrappers and reports. If it is garbage, throw it away and be done with it.

Bullet 3 Discard Files. These are actually three separate file folders in a drawer that is easily accessed by you. The discard files are used for those items that you think should be thrown in the garbage but you just aren't sure. These are the notes, scraps of paper, reports, etc. that you hesitate to throw away because in the back of your mind there is a nagging doubt that says you just may need it in the future.

Here's how you use this file. You label the folder with the current month. Everything that you think should be thrown away but you're not certain about goes into this file. At the end of the month, label a new folder and put it in front of the one for the month just completed. Do this again at the end of the current month so you now have three folders -- current month, last month and month before last. At the end of the third month you dump the oldest folder in the trash and label it with the new month.

Of course you may be tempted to keep it longer, but if you thought it was trash and you haven't needed it for three months, you can be confident that it should be thrown away.

Discard files help you keep all of those papers that you just aren't sure about both out of sight and accessible should you need them.

Bullet 4 Pending Files. These are the files you use for items pending some action. I recommend using two different pending files. The first are actions you are waiting for someone else to do. You've done what you need to do; so you put the notes in the file waiting for the action of some other party. A good example would be a magazine subscription. After you mail the check, you put the paperwork in the pending file until you start receiving the magazine.

The second pending file would be those items you are holding while you make up your mind. This is the place for all of those advertisements that you just want to think over. It is pending a decision on your part.

Pending files should be completely reviewed each month. Just pull them out and sit in front of the trash can to get rid of anything that you've decided against. If it is still waiting for a decision from you then leave it in the file for another month.

HINT: When the pending file gets really thick you will likely find it fairly easy to make decisions on a bunch of questionable items you really don't need.

Bullet 5 Unpaid bills. Have a separate file for vendor invoices that need to be paid.

Bullet 6 Paid bills. Once a vendor invoice has been paid, file it in your paid invoice file.

HINT: If a file gets more than about 20 items, it is time to create another file. If your operation is small you may only need a single paid invoice file. However, as it grows this file will need to be divided so that you can easily find the things you are looking for. Large companies will usually have an alphabetized paid file with a separate folder for each major vendor and a miscellaneous folder for small vendors with only one or two invoices a year.

Bullet 7 Customer files. These are the files you set up to help you keep track of your customers, projects and billings.

Bullet 8 File for sales invoices. Either numeric or by customer will work.

Bullet 9 Deposit file. This is a file of all bank deposits that you have made. Ideally, you will copy each vendor check and attach the check copies to the remittance advice sent by the customer. The deposits should be sequentially numbered.

Bullet 10 Tax files. You should create a separate tax file for each type of tax that you pay. Copies of the tax returns and work papers go in these files. Also file copies of any communications you make with the taxing authority. Never send anything to the taxing agency without making a copy for your file.

Bullet 11 Payroll files. These are files that you create for everyone on your payroll. The contents of the payroll files would include applications, résumés, government forms, performance memos and other employment documents.

Bullet 12 Contract files. These are the files you use in your business.

Bullet 13 Insurance files. Here you keep copies of your insurance policies.

Bullet 14 Correspondence files. This is a general file for correspondence related to incidental business matters that you don't relate to any other specific area of the business.

Bullet 15 Fixed Asset files. These are the files you use to keep track of your business property and equipment. Instruction manuals, warranty information as well as original invoices can go into these files. You retain these files for as long as the equipment is in operation.

With a good filing structure, you'll find it much easier to develop the discipline to put things away. It is easy to discipline yourself. Just make sure it is office policy that everything is filed away before you and your staff leave work for the day.