File System – By date
Most professional bookkeepers who do journal entries in a daily basis like to use this method. As the date close, sales receipts, deposit slips and all the other paper received for the date will be recorded into the correct journals, and each paper will be marked with a reference number in the order of entry. This works great with manual paper journal entry and software journal entry as well.
To set up a filing system sort by date, you can file:
With file folders:
- Paper folders marked from Jan to Dec (1-12)
- Paper clips
Method:
- Sort by date for each month, paper clip by date, week or month depends on the amount of paper you have. Do journal entry. Mark the reference number on each receipt. Paper clips them in order and put them in the paper folder for the month.
With holes binder:
- a three hold binder will do just find, or a binder box
- page separator with tab marked Jan to Dec (1-12)
- paper and tape
The advantage of this method is that it doesn’t take much time to sort your papers. It uses less folders and file separators, appear to be more organized and easier to retrieve anything by date.
The disadvantage of this method:
What if a customer called and asked why was she being charged on a certain order few months ago. The customer doesn’t remember when exactly; just know she made a purchase 2-3 months ago. If you are a business owner who doesn’t know anything about bookkeeping, you need to talk to your bookkeeper, and hope that the bookkeeper can find you that particular receipt for the customer in a timely manner. If you know bookkeeping and you kept a sales journal, you may be able to browse through the previous 2-3 months of records to find the receipts from that customer. If the business does a lot of transactions a day, this searching task will probably be very painful and time consuming.
Now let say if you are an experienced bookkeeper, you also make a copy of those receipts for each customer, and put those copies according to customer last name and first name. So instead of going through the sales journal, you go right into the customer folder to find the receipt. Voila, you can send a copy of that “copied” receipt to the customer right away. How about the original receipt? Now you have the date, go look for original receipts in the folders you sorted by date.
Sort by date is easy and fast to sort, but not so easy for retrieving them if a search criterion is not by date. In the above example, you need to sort by date, and also make a copy to sort by customers.
With a software system, you are in luck. Most software system automatically stored information according to the business needs. In the above example, you will be able to do a search and generate a report on all the purchases from that customer. Retrieve the particular transaction you are looking for, and use the reference number to find the original receipt from your file system. However, this will only come easy when you make use of the journal entry functions from your software, or you are very fluent in using your software. Unless you are a professional bookkeeper, or want to make bookkeeping your career choice, this is generally not a good idea.
The most popular choice of sorting receipts by business owners is by category. I will cover it shortly. Stay tune.
