Every business, big or small, is required to keep documents for different reasons. Filing documents can, however, not only be costly but can also be a daunting task. Find out how an electronic filing system can benefit you and your business.
Electronic filing systems use electronic devices such as PCs to store and organise files for easy access. The simple act of organising documents in folders on your computer desktop creates an electronic filing system. Big companies usually use servers to store more files than their smaller counterparts or individuals would, as these provide greater storage space, more computing power and greater control over who is allowed to access what.
Who Needs an Electronic Filing System?
Every company, regardless of size, needs to organise and keep files for different reasons. If your business handles tons of documents but you don’t have much office space, you would surely benefit from using an electronic filing system. All you need is a small, secure room where you can keep your server or desktop, scanner, shredder and any other device used to copy, save, store and even properly get rid of your documents. Think of your electronic filing system as your modern-day storage space.
What Kinds of Files Should You Keep?
Save documents that support tax returns for three years. These may include income-related documents like invoices, cash register tapes, credit card charge slips, and bank deposit slips; proof of deductible purchases and expenses like receipts, invoices, cancelled cheques, mileage logs, and credit card slips or statements; and receipts for charitable contributions. Because more and more businesses are choosing to go paperless, receipts and statements are often delivered online. Save your own copies of these in case of an audit.
Keep filed state and federal tax returns for at least six years, along with payroll records. Meanwhile, store documents that are relevant to your business operations and assets indefinitely. These include partnership documents; contractual agreements for vendor relationships, marketing, or commission and royalty structures; property records, including intellectual property, for as long as you own the asset plus three years after the year of the tax return that includes its sale; and deeds and titles. Checking with your financial or tax advisor for details specific to your situation is also a good idea, as rules change and can be industry or location specific.
How Can You Benefit from Using Electronic Filing Systems?
Electronic filing systems can help you save not only space but also time and effort looking for documents you may have not even seen for ages. Just imagine how long it would take you to go through a whole line of filing cabinets to look for a certain document that you may not even remember keeping. But if you have an electronic filing system on a PC or server, all it takes is to hit two keys (Ctrl + F) and it will do all the work for you. You can even go about your other tasks while your computer does the file hunting.
Storing your files electronically also lessens the risk of losing or misplacing documents. You don’t run the risk of leaving a physical folder in the restaurant you had lunch at, for instance. You don’t have to worry about it getting into the wrong hands either. Of course, this only works if you don’t allow files to be moved somewhere else and limit access to the right people and via only accredited devices. This helps you save time re-filing, too.
Electronic filing systems also allow two or more employees to use a file at the same time, something physical documents may not allow. And because electronically filed documents are now accepted by all legal standards, you no longer have to physically travel to any office just to present documents. All it takes is sending an email or a fax.