Over the years, I’ve often met with friends or clients who have decided to strike out on their own in business. We meet for coffee and I proceed to tell them about all the mistakes I’ve made over the last twenty years in the consulting business and how they can avoid them!

Old fashioned filing systemAfter discussing technology, marketing, how much to charge (popular!), and billing for their work — I always bring up the subject of filing bills and payments. Filing? What’s the big deal? You put stuff in folders. Right?

It sounds simple, but it’s hard to do. You always fall behind because it takes too long. It’s a pain.

So I’ve come up with my own system that works very well for me. And I always share it with the newest members of the “independent” business world.

The objectives are straightforward:

  • Has to be fast and simple so you’ll do it without fail
  • Have to be able to find a document quickly when you need it
  • Should be inexpensive

My system works on all three counts.

Here’s what you’ll need:

2-Hole Punch

2 hole punch

Arch Clipboard

Clipboard

2-hold fastener folders

Manilla folders with fasteners

Step-by-Step

STEP 1. I’ll assume you’re paying your bills using an application like Quickbooks or Quicken*. After a payment is made, punch holes in the top of the invoice and check stub (if you have one) and place the paperwork on the clipboard. Just put them on top without regard to what you’re paying. It might be a phone bill, a vendor, credit card bill, etc. Doing it this way will ensure the paperwork is filed contemporaneously, with the most recent payments on top.

Step 2. When the clipboard is full, transfer the entire contents to a new manilla folder. Write on the front of the folder to identify what’s inside: begin/end dates, begin/end check numbers.

Step 3: Put the folder into a box or container for the calendar year.

Finding Things

If you ever need to locate filed paperwork, just go to your computer and search for the payment in Quickbooks/Quicken. Once you find the payment date, it will be quick work to find the right folder.

Just punch, file and find. That’s it!

2 hole file system steps

*Revised 3/1/11

I’ve given up on Quicken for Mac due to the never-ending lack of support from Intuit. I converted 20 years of historical accounting data to iBank from IGG Software on January 1, 2011. iBank is a Mac-only software application. I’ve been satisfied with its performance so far.

How long should you keep paper records?

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