In addition to general data management issues, there are other financial records whose management you need to systematize. These will improve the security and stability of your business as well as help you meet the requirements of the IRS. You’ll have others specific to your business and the market you serve, but here are some general guidelines:
•Keep copies of your business tax returns in a special file forever. Retain all tax-related documents for at least seven years.
•Maintain a file of capital equipment expenses (computers, manufacturing equipment, office equipment, and so forth) forever.
•Make and maintain copes of any legal documents (commercial leases, contracts and so forth) in one place.
•On a regular basis, back up on floppy or removable disks any financial records you maintain on your computer. Remember, there are only two types of people: those who’ve lost data, and those who will. Don’t learn the hard way. Also, make a duplicate backup disk and store it in your safe deposit box or other secure off-site location. Replace the stored disk with an updated version on a regular basis.
•Keep your invoice file up to date.
•Establish a central location for storing regular financial reports regarding your business, to chart your business growth over time.
•When it’s time to purge financial records, use a shredder. Compact shredders that perch over standard office wastebaskets are about $100 and are a wise investment for maintaining business security.
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