From Paper to (Almost) Paperless

“Americans spend 3 billion hours per year filling out tax forms and keeping tax records.” ~ Jim Ramstad

There are two things I’ll never do again: first, teach one of my own kids how to drive; and second, help my Aunt May file her tax returns. I’m pretty sure you know Aunt May, or someone just like her. She’s a really sweet lady whose house looks spotlessly organized until you open a drawer or a closet. When she hints that she needs help with her taxes, you volunteer. I mean, she needs you, and she’s so nice! How hard could it be?

Anyway, that’s what I thought. But a day before taxes were due, Aunt May came over with six boxes full of paper. Six boxes! Each contained every manner of paper from receipts to bank statements to movie tickets to Christmas cards. Everything under the sun – except the things I needed. It took sixteen hours, eight aspirins, and three pots of coffee to figure out that she was getting a refund of $1.47. Nope. I adore my Aunt May, but I’m not going through that again.

I’ve never been quite as disorganized as Aunt May, but I’ve certainly had my moments. I discovered pretty quickly that I had better organize my business so I could find what I needed, when I needed it. When you’re trying to convince a potential seller that you run an organized, professional operation, it’s best if you can find the contract they signed.

When I started out, record-keeping meant paper and file cabinets. It took a while to get in the habit of saving my receipts in a logical way, rather than stuffing them in my pocket and accidentally washing them when I did the laundry. Eventually, though, I came up with a system that worked pretty well.

Nowadays, most of what I keep is digitized and stored electronically, although I do keep legal documents with original signatures. I strongly recommend that my students digitize as well. It saves an incredible amount of space and time.

There are several ways to convert your paper into electronic images. I recommend that you have more than one method available. Your first option is to have a full-blown scanner in your office. This is handy for scanning documents with many pages. Get one that has a flatbed screener and a feeder, and get one that’s pretty fast.

Another option is to carry a portable scanner. I like the kind that’s about the size of a three-hole punch; I can scan documents on the go without messing around with big, clunky hardware.

Finally, you can install a scanner application on your smartphone such as CamScanner or Genius Scan. To use a smartphone scanner, you just take a picture of the document – it’s almost that simple! The app creates a document – either an image or a PDF file – that you can store on your phone, email, or upload to the cloud. This is great if you’re one of those people who seems to collect pieces of paper all over the place. Just take a picture of that receipt, and throw the original away.

But scanning is only half of the equation. Just like six boxes of mixed-up documents won’t help you much with your taxes, neither will 16 gigabytes of stuff that’s just thrown into one or two electronic folders. In that sense, it’s no different than paper: you’re going to need a system. If your paper filing system worked for you, it’ll be easy: just make electronic folders that match your paper folders. Once that’s done, come up with a standard way to name each kind of item so you can find it easily. Voila! You’ve got a great electronic filing system!

It’s not enough to set up a system, though. You’ve got to use it! Managing electronic records still takes diligence and time. The best filing system in the world won’t help you if it’s not utilized consistently.

I’m happy to report that I no longer stuff receipts into my pocket. Funny; my Aunt May told me the same thing last week. She called to tell me she doesn’t need my help with taxes this year because she got herself a scanner.

He’s 12 years old and lives down the street.

And boy, oh boy, I wish him luck.