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3d illustration of folder finded in big archive cabinet
The financial systems of the yesteryear are gone. With financial technology becoming easily available and the technological revolution, there are plenty out there. Fintech is making pathways for professionals like accountants and bookkeepers who have massive amounts of paperwork to deal with. With the web evolved and technology galore, traditional financial systems are biting the dust. Not just due to the advancement of systems and technologies but from obsolete physical systems that pose a danger to security and reliability as opposed to digital systems. These systems are heavily undermined as they cannot take advantage of innovations in the digital world. An accounting department filing cabinet is one of those systems.

An accountant is a professional that deals with taxation which makes it legislatively important, for starters. They also help with portraying the financial health of a business and evaluate credit worthiness. Measuring, processing, and coordinating financial information of economic entities is called accounting. It is the summation of an organization’s activities related to economics and uses information related for users such as creditors, investors, management and regulating authorities. The scope of this field is vast and, due to its broad usage, tax accounting and auditing are also a part of it. An accounting department filing cabinet is part of it’s processing and practices.

The Evolution of Accounting

Accounting is centuries old so it is not hard to understand the need for standards and regulations in this vast field. The 21st century practices differ from the last century due to the formation of bodies and other authorities that govern the laws of accounting such as GAAP or IFRS. Having been around for so long, the accounting profession is desperately in need of an upgrade to better fit into the digital era. For classification needs, an accountant needs to record all particular asset details and information.

Like the accounting department filing cabinet, all records are known to the accountant and where they are stored. Like skeuomorphism, where models are made to depict real-time objects that are imitated, using century-old methods like cabinet systems pulls down the potential of an organization, thus making a profound impact that generally allows competitors to move ahead. The physical attributes are such as the cabinet versus digital filing.

Depending on the requirements of an organization, the cabinet holds information that is vital for the progress of the business which leads to growth and development. In a physical system, such as an accounting department filing cabinet, it is crucial to know where the information lies, which folder has it, which section it underlies, etc. Anyone who is assigned that task will be grateful and appreciative of how the data is stored, retrieved, managed and organized. There are many fields where data can be stored under categorization like copying papers and placing them in various places for ready reference but this practice is wild as workloads grow and paper management becomes a curse.

To allow more freedom and ease in life, accountants use a prescribed system of account classification such as billing, costs, expenditures, and physical goods that help them acquire information readily unlike the accounting department filing cabinet.

The digital era of our modern world has various concerns. Let’s take hashtags, for instance. Anyone on social media is aware of it while hash tagging pics of friends or a tweet. The nature of this is that hashtags are unstructured data in the domain of big data. It’s not compatible with accounting as structured data is used for financial reporting or training. Without reinventing itself, it cannot use hashtags as information organization but, upon realization of this problem, accountancy has to think up new ways to develop and grow to accommodate a modern world’s needs.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Office clerk searching for files into a filing cabinet drawer close up, business administration and data storage concept
It’s a common practice among accounting and bookkeeping departments to have multiple filing cabinets, including locked ones, to protect payroll and other private information. Access to financial files and data should be limited to certain key people in the company. To protect the information, it is critical to implement a file system in your accounting department; however, it can turn out to be a tricky task if not done correctly.

What causes a file system to collapse? It is highly likely that it was not much of a system to begin with. Chances are that you had assorted the files randomly without giving it much consideration at the beginning. Simply placing a label on your files will not turn it into an effective system. To implement a file system that can billet any type of paper, whether its at home or in the office, all you need are various colors of 2/5 cut tab colored folders and box bottom hanging folders.

Categorize the Files

The first thing that you need to do is sort the files into categories. Sort through your current pile of paperwork and arrange everything related to finances in one category, fixed assets into another, and so on. The focus at the moment is not on the detail, rather on assorting documents of similar nature together. Later, we will worry about sub-categorizing them. Credit card bills and bank statements all fall under finances in this step and will be separated in the next step.

Create Subcategories

Once you have arranged the documents according to their respective categories, it’s now time to subdivide them so that you exactly know where to search when looking for the respective information. Finances for an accounting department can be sub categorized into checking accounts, saving accounts, and credit card accounts. Be specific about your subcategories and don’t just use random words for labeling them. This kind of arrangement will help you clearly identify what you want to look into.

Color Coding

The major categories for all of the documents should be assigned different colors that will differentiate them from the rest. Put the files in hanging file folders together with their respective categories. If you have selected a green color for your accounting documents, the subcategories can be in other shades of green. While filing your retrieving papers, this will save you a huge amount of time. Your brain is better able to sort stuff out when things are highlighted by different colors. Implement the file system in your office which allows you to work effectively through each category without wasting time with mixed up information.

Make Labels

After coloring is done for each file, it is now time to label them. Advance from general to specific categories. For your accounting office, the general label can be credit cards while specific labels can be Visa, Master Card, etc. After labeling the files, try to arrange them alphabetically so that you can quickly move to your desired paperwork. The point is to arrange similar files together in close proximity.

Expenses should be filed distinctly from payroll and other accounting aspects. If certain transactions belong to more than one area, such as expenses and fixed assets, make copies of the paperwork and put the documentation in both files after labeling them. Implement a file system that categories expenses by vendors’ names and in alphabetical order. Fixed assets can be categorized by purchase dates.

Filling your Drawers

This will be the last step of your filing process. By now, you have almost sorted most of your accounting documents. All you need to do is put them in a place where you can easily access and identify them. Put everything in a drawer in alphabetical order and place the colored files in hanging box bottom folders to ensure that they stay upright within the drawer. The 2/5 cut tabs are places above the hanging files so that it is easy to decipher each category.

If you successfully implement the file system mentioned above, your accounting business will receive a major boost.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

 

 

 

 

 

Sustainable development concept. 3D illustration on wooden background.
On a daily basis, many activities take place in an organization including production, distribution, sales and procurement. All of these processes generate invoices, memos, purchase orders and different documents every day. Most of these documents go through the accounting department, creating a mountain of paper for bookkeeping. Most of these papers contain sensitive information, hence, it’s not possible to just throw them out. Disposing of these requires special machines and shredders, and they don’t come cheap!

To steer an accounting department toward going paperless, companies must invest in a paperless accounting software. Usually, someone from an accounting department needs about 3 minutes to get a file from a cabinet. But in a real-life situation, it’s never 3 minutes. Adding distractions along the way like going to the bathroom, staying to talk to a fellow colleague, getting a drink of water and many other distractions makes it a 20-minute task! The estimated 20 minutes does not include the time it takes to take into account the effort it’s going to take if the file is misplaced or stored in a different storage unit.

Fortunately, with different accounting management programs and ERP solutions for corporate use, an accounting department can become paperless in no time, saving effort, time, and precious resources.  Here, we will highlight five ways to help you keep the accounting department paperless.

1. Time Management and Document Handling

When the accounting department of your company is entirely paper-based, listing and storing each document needs a sophisticated and seldom confusing process. For example, every time a purchase order arrives in the accounting department; the accountant is required to place it in a separate section with the time and date it arrived, correctly logged. Logging the time, date, client name and order details are useful in retrieving the document, but it takes a lot of time and effort. Moreover, the accountant or bookkeeper is bound to make a mistake and incorrectly file the document at some point.

On the other hand, if you invest in accounting software, the accountant won’t have the need to file every document manually. The software will automatically generate invoices, sales reports and purchase orders for every item. The accounting software will save time and make the entire documentation process simple, convenient and easy to retrieve.

2. Reduce Supply and Storage Cost

Documents in the accounting department rely on storage facilities, meaning that the department is cluttered with file cabinets and drawers overflowing with paper, printer supplies, and envelopes. The software will assist in making the accounting department go completely paperless. With no papers to store and record, the department won’t need large cabinets to store them in. A paperless office in an accounting department will be cost-effective regarding spending money and space on storage units.

3. Make the Retrieval Process Easier

Having an accounting software makes it easier for you to retrieve information about any specific file without the need to fish through thousands of files in a large cabinet. The software makes the accounting department entirely paperless by its streamlined operations. Each file has its own code or a serial number that allows swift access to any file, anytime. Proper content management features of the software are useful in organizing all the files according to any category the company needs to transform the work space into a paperless office.

4. Swift Response Time

When you have an efficient paperless office software to handle all business operations and content management, it makes it easy for managers and accountants to reduce their response time for queries from different departments. For example, if a customer calls to complain about a product defect in a new purchase; using the designated serial number for the product, the accountant will be able to retrieve all the necessary information about the product.

5. Invoice Processing is Easier and Faster

As the accounting software for bookkeeping relies on using electronic invoice processing, it eliminates the need to make the accountant enter the data on the invoice manually. Using a software makes the procedure of invoice generation and storage relatively easy. Some software has a scan feature that allows the accountant to scan any crucial invoices still on paper.

Conclusion

Going paperless in any business is not just cost-effective and easy, it also makes things simpler for accountants to record all the invoices with ease. It makes it easier for an accountant to manage all the files and invoices needed for effective bookkeeping, as they are electronically generated. Going paperless in an accounting department is a step towards having a greener and better environment.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.