Ooops! I am in over my head! (Book keeping)

[Roon]

Since January my Uncle's shop has just been stacking invoices and receipts in drawers and on top of the desk. I now have to organize all the paperwork and get it separated so we can file taxes next year. How should I break down the filing system? By day? By customer? by month? I have no idea how to do this. Can anyone help?

This business has grown by leaps and bounds since the weather started getting warm,if I don't do something soon,it's going to get away from us.

[CaliforniaPeggy]

1. My dear Roon...

You might PM WCGreen...

He's an accountant, and knows this stuff backwards and forwards...

:hi:

[grasswire]

2. hire someone to do the books.

It could be cheaper in the long run.

[yellowdogintexas]

3. spread sheet software /database software and hard copy filing

intially sort all the completed stuff, either the company has pd it or the customer has paid it, by:

expense vs
income (ok the technical terms are Receivables and Payables)

because that is how you need them divided for IRS purposes

then within those two categories, alphabetically by payee if it is an expense and customer if it is income. That takes care of all the stuff that is already paid, or completed. Then you can enter the info on the spreadsheet/database fairly easily.

You will also want a second set of files for Unpaid items in expenses/bills and uncollected bills on the invoice side. That will be just the current stuff you are working with after you get all the paid bills and collected invoices filed, so it will be much smaller. Those you can use a 31 day expanding folder for, and store by due date so you don't forget to pay them on time and so you can send a second notice if it somethimg that is owed by a customer.

the spreadsheet will take care of the date order and the math for you.

You need the business expenses for writeoff, everything (just about) counts, so include all the receipts for pens, paper, other office supplies, etc.

I am not an accountant or bookkeeper by profession, this is what worked when my husband had his own business.

With PCs you don't need special expensive office forms. Just design a nice invoice on the PC, save the blank and make the bills up ..then you can print them for mailing and hard copy filing OR you can save to disc file in the PC. A nice little virtual filing cabinet. Heck you can scan the documents into the PC too.

[Roon]

4. Thanks for the advice everyone! eom

[myrna minx]

5. Organize by month.

For the payables, organize the paid invoices in chronological order from oldest to newest, based on check number. Believe me, it will help you in the long run.

[harmonicon]

6. tape them together to make up a sport jacket

that's what Bernard Black would do.