I’m writing this post as a reminder to myself…I used to be very, very organised and I loved the accounting part of my jobs in the past. However, since having children and having a couple of different home businesses, it has become more complicated and I have much less time (and I’m no longer being paid for it), my financial paperwork is a jumbled mess. I’m sure I’m not alone in this, am I? Who is with me to dig themselves out of the paper piles to a calm and organised state once again? It’s actually not that difficult at all!
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Of course, the first thing you will need to do is to gather up everything you have right now and get it organised and up to date. In my case, this took most of the week, but I am determined and the children are helping me out by trying not to disturb me (I have left them with a lapbook to work on, as well as a couple of other projects they can do independently), and today Phil has taken them out for a drive in the country to give me some space and quiet…shhh, I am currently taking a short break with a cup of tea to clear my head before I start making those bank transfers.
Practical Ways To Organise Your Finances
I work in two different systems, depending on what I am working on, but it would probably be best to have one way to organise your finances. For personal and household accounting I download the bank statements into a spreadsheet, print it off, and go through it cross-referencing the receipts I have and making transfers between accounts as appropriate. I then have a spreadsheet that I use that is broken down into categories so that I know how much is spent each month/year for our mortgage, heating oil, car insurance, new paint for the house, etc. I then use this information to budget ahead for the next year so Phil and I can pay into the account each month to cover the current expenses as well as save in advance for those once-a-year outgoings.
I then file the bills and spreadsheets in plastic pockets/files in a binder, and once a year clear out what isn’t needed and anything that I need to keep (receipts for warranties, etc.), go into a filing box in the attic.
I haven’t completely immersed myself into this system as I still keep paper copies of business receipts, but I may try out a program next year so all I will need to do is take a photo of a receipt with my phone to upload it to a digital system (have you tried that – does it work?). For my business accounts, I do use Wave, and the free version does work pretty well for me, but there are a couple of things I still struggle with when working with more than one currency. Once the initial set-up is done and you get the hang of it, it’s faster than organising accounts the “old-fashioned” way. Another great perk is the fact that organising your financial records electronically takes up a lot less space.
The vast majority of banks, credit card companies, utility providers and other types of businesses already give consumers the option to receive their statements and bills electronically. If you’re not already doing this, now is the time to sign up. It’s typically fast, convenient and free, and in many cases, you can save money by receiving electronic statements as many places here now charge for paper statements. If you still want copies, it’s usually not difficult to download the statements as PDF files that you can then either save or print.
Some accounting software can also integrate with your bank, credit cards, and PayPal so that it’s all downloaded into the program for you, thus saving you time.
Choosing a Filing System
Whether you want to go electronic or not to organise your finances, you need to come up with a basic filing system that’s easy for you to stick to and not get frustrated with. There are several ways to set up a filing system, these methods include:
- Month-to-month, which is a good choice if you don’t have a lot of credit card payments and other recurring bills.
- Colour-coded filing. if you’re more of a visual person, colour-coded files are probably for you. This can also help if someone else is helping you with your accounting.
- Subject or category, use a separate category for each company you pay or create your own meaningful categories such as “credit cards” and “utility bills.”
Always open your bills and other financial correspondence as soon as you receive it. Take the time to pay (if necessary), and file the documents away immediately makes things streamlined and reduces stress and clutter.
Don’t be like me last year! The last thing you want to do is wait several weeks (or months) to file those papers! Yes…I spent hours and hours and days and days getting the past 21 months’ worth of income and expenses up to date! This only compounds the chaos and stress when you need to spend hours transferring receipts and other documents from a huge pile on your desk, floor, bookshelf, or the proverbial shoe box to their (newly-appointed) proper location.
Sometimes it doesn’t make sense to turn on the laptop or PC everyday to update spreadsheets or accounting software. In this cases, set aside some time either weekly or bi-weekly (monthly at most) to update your accounts and then file your documents in order. In my case, it’s now been two weeks since I completed my year-end and I have some time scheduled in my favourite planner on Monday to update the past two weeks.
I’ve also ordered a fresh, new filing box so each year’s stack of paperwork can be organised all in one place, which means I won’t be collecting dust on the files I can send to the shredder, and if I need to put my hands on a particular document, I’ll know exactly where it is.
Depending on your current state of affairs, sorting things out may take some time, but that’s okay, it happens to the best of us! With a little bit (or maybe a greater bit) of time and effort, you will have finances organised and in tip-top shape before you know it. Remember, it’s not how fast you get everything done, it’s that you make steady progress, get your taxes paid on time with minimal stress, and set yourself up for faster and more efficient systems for the future.