How to Keep Your Financial Records Organized

Posted on 28. Apr, 2009 by in Misc. Articles, VirtualConnections Newsletter

Despite the fact that so many are using computers today – people still have way too much paper to deal with! Here are some quick tips to help you keep your financial records and receipts organized throughout the year – so that tax season is less of a burden!

  1. Monthly Transactions. I have found that this system works well for many small business owners. Create a file folder January through December. Keep two months at a time on your desk (i.e., January/February, April/ May) in an area that is easy to access – colored file folders really help too. When you make an online purchase, print out the receipt and place it in the file folder for that particular month. The same holds true for toll receipts or the receipt from a lunch you purchased when you met a potential client. After your credit card statement comes in and you have paid the bill, place the statement, along with your month-end bank statement, in the file folder. Now you either can send the file to your bookkeeper, or reconcile your accounts if you are the designated bookkeeper, and then file the completed month in your file cabinet.
  2. Client Invoices. When you prepare a client invoice, print out an extra copy and file it in an invoice file earmarked for the current year. At the end of the year, you will have a record of all income for which you have billed. In case of a computer hard drive crash, at least you will have a record for tax purposes.
  3. Mileage Log. It’s easy to create a mileage log in Excel to track your trips to client meetings, your run to the local office supply store to purchase the ink cartridge that just ran out or perhaps the run to the post office for postage or to mail that proposal to a new client. Don’t forget about networking events that you attend as part of your stepped-up marketing plan. The spreadsheet should have a column for date, odometer start/end, total miles, and description.
  4. Out-of-Pocket Expenses. We all have cash outlays throughout the year – the coffee we purchase at the airport, the tolls we pay to go to a meeting, or a quick lunch we buy at a seminar. Keep these receipts in a colored envelope marked with the year and track the expense in an Excel spreadsheet. You can total them either monthly or quarterly and reimburse yourself for those expenses. Please be sure to hand off the receipts and the spreadsheet to your accountant at year-end.
  5. Tax File. Create a tax file folder at the beginning of each new year. Throughout the year, place any tax-related expense in that file, such as medical receipts, prescriptions, monthly or quarterly investment statements, property tax bills, and year-end bank interest statements. At the end of the year when you are gathering paperwork for your accountant, most of the information will be readily available and you won’t wonder where you placed the tax refund notice you received in April.
  6. Bank Statements. For those who do not receive monthly bank statements in the mail, I suggest you create a file folder for bank statements on your computer. Each month, download the file from your bank’s website and save it in this folder. You can set up the folder as a password-protected file if you have other people using your computer. At the end of the year, burn all the monthly statements onto a CD and store with your income tax information for that year. Most banks only hold 18 months of statements on their server, some only 12 months. The IRS requires you to hold 7 years of bank statements in case of audit. Once the CD is created, you can then delete the files from your computer and create a new folder for the new year.

I hope you find these tips helpful so that you no longer feel so overwhelmed when you’re trying to get all your files in order for tax preparation. If you are interested in receiving the Record Retention Schedule that the IRS recommends for businesses, please email me at and I will be happy to forward it along to you. Happy Organizing!

I would love for you to share ways that you have to be helpful in keeping your financial records organized. Please post below.

Linda Siniscal, is the owner of Third Hand Secretarial Service, LLC which she started in 1994. Linda is a certified bookkeeper with the AIPB, licensed and certified professional bookkeeper with the National Association of Certified Professional Bookkeepers and a Certified QuickBooks ProAdvisor. She is the former Treasurer for the International Virtual Assistants Association and served on their Board of Directors for the term 2005-2008. She is currently serving on the Board of Directors for the Delaware Virtual Assistants Association as their Treasurer for the term 2009-2011. Linda can be reached at or at 732-899-0810. Website:

Still need more help? Download this Record Retention Guide for Small Business!

record retention guide


One Response to “How to Keep Your Financial Records Organized”

  1. Lynn Edwards 6 March 2012 at 6:09 pm #

    Linda, these tips are the best for a person like me. I’m organized but hate organizing my financials. I think a few of these tips will help ,make my accoutants life a little easier come tax time next year. Thanks for sharing.