Common-Sense Guide for Safe Paperless Financial Records: Spring Cleaning with a Twist

We could tell you it’s time to do your spring cleaning and “go paperless” to manage your financial records.

Spring Cleaning with a Twist:  Guide for Safe Paperless Financial Records

Plenty of folks are telling you that now is a great time to do it.  Tax season is well under way, so you likely have most of you financial paperwork gathered and (hopefully) organized.  And, with spring in the air, many of us feel a desire to clean up and clear out the old.

But here’s the twist – your financial records are already paperless.  Or most of the important ones, anyway.  

Any payment from the government is likely made to you electronically, your bank records, payments, credit card statements, mortgage applications are all done electronically and stored online; heck, even your tax preparation was most likely done and submitted electronically.

So why create this guide?  Because “paperless” is NOT only about getting rid of paper.

It’s really about the intelligent management of the documents, records, and data captured within those papers. And the ownership, stewardship, protection, and access to that information.  And in the end, that responsibility lies with you – you are the ultimate owner.

So here’s our common-sense guide to “going paperless.” Contrary to most articles that will tell you how to go paperless, it doesn’t start with scanning your existing paper or telling you to request that every single business transaction you make be done electronically. Or suggesting that you use variety of free apps to capture and store your files in hundreds of different locations, all of which are owned by third party providers.  Our guide is based on good, common-sense answers, some hard work and time spent in planning on your part, and solid advice that comes from years of experience in the field.  So, without further ado:

eBizDocs’ Common-Sense Guide:
Managing Your Paperless Financial Records

Step One:  Start with a plan.  Without a plan, you are planning to fail.

As any good organizational expert (business or personal) will tell you, you cannot manage anything without a good plan.  And a good paperless document management plan includes some of the following key elements:

  • Know where you are going to store your electronic records.  (More on this in Step 2…)
  • What do you need to store?
  • How long do you need to keep it?
  • How will you find it?
  • Who needs to be able to find it?
  • What organizational structure will work best for my needs?
Plan to keep everything in one central location.  It just makes sense, and is much easier to manage in the long run.  And definitely consider using a management tool to help you keep it organized.

Think about it – if you wanted to organize your paper records into an optimal system, you’d likely keep them in one central file cabinet, preferably into neatly labeled folders organized by type. No one would assume that keeping some papers in your bedroom, others on the dining room table, and still others in a box in the basement would be a great system.  Yet that’s exactly what many of us are doing with our electronic and online records.

No tool, no matter how good, will work if you fail to plan.

Step 2:  Set up safe, secure, protected storage for your records.

Securityreally matters.  Unless you’ve been completely off the grid for the last several months, it’s painfully obvious that businesses regular lose our information.  Remember, any free service, including Google Drive and Dropbox, are making money somehow – and may not be as committed to protecting your records or maintaining your privacy as you are.  And making use of 5, 10 or more 3rd party apps on your mobile device, each designed to manage a piece of you financial records, is neither safe nor efficient.  So what do you do?

  • Option 1:  Store your records in a common location on a local computer, and make darn sure you have a good, reliable backup service or solution.  One that you pay for.  And make sure that your backup is stored somewhere other than your primary computer.
  • Option 2:  Utilize secure cloud storage options.  Again, these are not free, but they’re not going to break the bank, either, and they are worth every penny you pay.  Best of all, they generally include automatic backup, so you save time and money on that service as well.
Note: If you are a business and need more detailed security and access options or have specific records management concerns, you should seriously consider investing in a document management solution that can help to protect and manage files based on access needs.

Step 3 (this is the biggie): Inventory.  Everything.  Everywhere.

You have to know what you’ve got, where it’s currently stored, and who “owns” or manages it.

Make a list of all the places your financial records are being kept. While you’re at it, keep an eye out for your health and other personal data and files.  Places to look for your records:

  • Online banking sites
  • Credit sites
  • Online tax prep sites
  • Your online account for your cell phone.
  • Government sites, including social security, etc.
  • Your mobile phone, and any apps on it.
  • Your email inbox (Despite gigs of free storage space, your online inbox is not an adequate records/document management tool!)
  • Your computer
  • Any paperwork in your home or office.

If this exercise shows you anything, it should make it very clear that you have a ton of financial records that are already paperless.  In fact, for most of us in today’s world, our digital financial footprint is much bigger and far-reaching than our paper piles.

Step 4:  You’ve made a place for everything, now put everything in its place.

Make electronic copies of everything you have online.  Bank records and statements, online receipts, tax records, cell phone bills, payment records, if it’s out there, print a digital copy.  If it’s on paper, now is the time to scan it.  Preferably to PDF.

There are 3 really important points to follow here that will mean the difference between making a paperless mess and creating paper-free success:

1.  Don’t print your records into paper files! This would, of course, defeat the entire purpose of the paperless exercise.  Print to PDF.  It’s particularly easy for any online records if you use Chrome as a browser.  Just use the print dialog and save as PDF. Done.

2.  Names REALLY matter. Make absolutely sure you use names for your files that make sense.  If you use a document management tool, this is generally built into the program, but if you’re just storing home records, you can get away with a consistent file naming scheme in your folder structure. No matter what tools you use, it’s very hard to find files that you haven’t named properly.

3.  Remember the effort you put into planning? Make sure that you save the electronic copy exactly where it belongs, based on the planning and structures you set up in your planning process.  Every single time you save a new document.  Trust us, if you don’t, you will regret it. (We certainly do every time we neglect this step ourselves and have to hunt for files and clean up the mess later!)

Step 5:  Maintain Your Spankin’ Clean System

Clean out old files after they’re no longer needed (check out this list of retention recommendations for common personal records.) Scan anything that comes into your house as paper directly into your system.  Request electronic receipts and statements, but make sure you copy them into your system.  Keep up with your backups.  And clear out old online records (or ask that they be purged – many systems won’t do it as a matter of course.)

And go ahead and shred those old files.  It’s spring – maybe you can use them as mulch in the garden!

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