Is your small business cluttered with paper documents? When you rely on paper to keep track of business finances, you often end up wasting time and resources. For an efficient accounting process, follow our tips to create a paperless office.
How to start going paperless in the office
Paperless accounting can save your small business time and money. You can reduce the amount of paper you use by making a few simple changes. Here are six steps for converting to a paperless office.
1. Scan digital copies for your paperless office
Having more than one copy of your financial documents is a good idea. You reduce the risk of damaging one document and losing important information. But, making multiple paper copies of your financial documents costs money. And, you double the amount of storage space necessary for accounting paperwork.
Instead of keeping more than one paper copy, back up documents digitally on your computer. By electronically filing documents, you avoid storing unnecessary paperwork. This is one of the many paperless office benefits. You can still print as many documents as you want when you need them. Also, scan and save customer orders, receipts, and other documents on your computer.
Backing up documents on your computer is one of the major paperless accounting office best practices. Doing so will help protect information from being lost. Storing documents online prevents you from losing information if your computer crashes. You can also use a memory stick or external hard drive to back up accounting paperwork.
2. Sign up for online banking
If you don’t already have one, you should open a separate business bank account. A bank account used only for business purposes separates personal and business funds. Once you open your business account, sign up for online banking.
With online banking as part of your paperless accounting system, you spend less time running to the bank and writing out checks. You can pay bills, move money to different accounts, and review your bank statement with online banking. An online bank account gives you 24-hour access to your statement without having to wait for a paper copy in the mail.
3. Record transactions with software
As a small business owner, you need to record all your business’s transactions. If you track money by hand, consider switching to online accounting software. This is one of our best paperless office tips because accounting software reduces the amount of paperwork at your business and saves time.
Cloud accounting software stores financial information on the internet. You can access your books from any device with an internet connection. By entering your transactions into the software, the program will automatically calculate totals for you. The software company should guarantee security and accuracy.
4. Create digital statements for your paperless accounting
Financial statements help you track progress and make decisions. Paper statements, however, can be a nuisance. Creating statements by hand takes time and can make your information prone to errors.
Instead, choose a software program that allows you to create financial statements. The software automates the information you enter, providing you with accurate end balances. The time savings from digital statement creation is another example of the many paperless office advantages. The statements are uniform so you can easily compare one month’s financial health to another.
If you need a paper copy of the statement, you can print it. Otherwise, the statements are stored online for when you need them.
If you don’t use software, you can can use an application online or install one to your desktop to create statements for your paperless workplace. For example, you could create statements on an Excel spreadsheet. By entering in formulas, the spreadsheet will calculate totals automatically. The statements are stored digitally until you need to print them.
5. Use electronic invoicing in your paperless workplace
An effective invoicing system is critical to your small business. You don’t want to waste time and money on collecting the money owed to you because of poor invoice payment terms. Sending digital invoices could be a solution to time-consuming and costly billing issues.
By sending invoices digitally, you don’t need to buy paper, envelopes, or postage. You can invoice customers via email or use a software program with an invoicing feature. Electronic invoices give you a consistent invoice template, so you don’t have to start each invoice from scratch. Customers receive electronic bills faster than mailed invoices, so you might get paid sooner by including electronic invoicing in your paperless accounting system.
6. Pay taxes with EFTPS
You need to pay federal taxes for your small business. Taxes could include income tax, self-employment tax, and sales tax, among others. For an easy way to pay federal taxes, register with EFTPS.
The Electronic Federal Tax Payment System (EFTPS) is a free service that allows you to pay federal taxes online. You can use the EFTPS to pay all federal taxes. Sign up for EFTPS through the IRS using your taxpayer identification number, bank account and routing numbers, and name and address. Then, follow the step-by-step directions to make federal tax payments.
Need a simple way to keep your business books in a paperless workplace? Patriot’s online accounting software is easy to use and made for small business owners and their accountants. We offer free, USA-based support. Try it for free today.
This article has been updated from its original publication date of March 14, 2017.This is not intended as legal advice; for more information, please click here.