Something that many people do not realize is just how much data companies end up needing to store. Even from your first month, there are certain things that you should keep record of. Keeping it all organized, let alone readily accessible, is a huge challenge for a lot of us.
Even making sense of the records that we need to keep can be confusing. When I began to look into the topic a bit more, I realized that there are probably a ton of small businesses unaware of this and how important it becomes when tax season rolls around. Sure, pages such as this one, calbizjournal.com do provide some details, but the language is not overly clear.
Therefore, my mission is to help spread knowledge about this. Given how much we really need to keep, storing it all can be problematic as well. There are solutions, but it takes a bit of digging to find them. I will be covering that as well, of course.
What do we as Businesses need to Hold onto?
To begin, we can start here. There are obviously several categories that we need to keep records for, so sometimes it can get complex. I will not list all of them here, but instead highlight one or two that are particularly important.
The first that I tend to think of are gross receipts. These can come in a few different forms, but the general idea is that they are a record of any income that you make as a company. Some examples are receipt books, invoices, cash register tapes, 1099-Misc forms, and deposit information for both cash and checks.
On the flip side of the coin, you should also keep track of any expenses. Both are vital for when you file your taxes, so admittedly they are already probably things that you do record keeping for. However, it is still worth discussing, considering the minutiae involved.
As the title implies, this category involves any of the money that your business spends on related items or services. Any receipts that you have from those transactions should be stored, alongside any cancelled checks, proof of payment documents, credit card statements, and invoices.
Maybe you are thinking about how much this already seems to be. I understand that concern. While there are some guides out there, including this one, on how to manage this problem, that does not always make it easier.
How Can we Store it all?
This worry is only natural, considering all of the documents that we have to retain. I did not even cover all of them in the above section – so yes, there will likely be more. This requires a lot of space, both physical and digital.
Each computer that we own has a hard drive in which we can store a limited number of files. Depending on the model that you have, it is usually several gigabytes. We can also get external drives. I have one that is a terabyte, allowing me to store many of my excess documents.
Unfortunately, at some point, even this will likely not be enough. What can we do, then? Well, one potential answer to this predicament is to get a data center, which typically offers a large amount of space.
In terms of what they are, the answer is fairly simple. They are places where we can store data and share it to others via a cloud service. Depending on the type that you opt for, they can have some additional functions as well. Plus, if someone like Walt Coulston is involved in their design and creation, they can also have as little an impact on the planet as possible, which is important to many businesses these days.
Obviously, the most important aspect to them is that they provide a repository for our files. While many prefer to keep everything on paper, if you want to take up less space in your office, you could always use a scanner to keep digital documentation of receipts and checks (as just two instances of applying this). Paperwork sends me into a bit of a spiral, so that is usually what I end up doing.
In regard to organization, though, you might be wondering what difference this can make. Of course, you will still have to utilize your own sort of system to label all of your folders. However, given the ample space that is available in these, it is not nearly as much of a hassle.
In addition to that, the ability to share data with your employees and your clientele is invaluable. For a part of computers that seems to be rarely discussed, they can make a world of a difference for large organizations and small ones alike.
So, if you have found any of this information enlightening, I am glad! While it can be hard to take the plunge and make a large investment like this one (depending on the size that you prefer), it tends to be worth it.
