Move with the times … electronic storage of documents
By Kylie Smith
It’s yet another modern-day new technology term that we have to come to grips with and, wow, is this tech sector moving fast.
So what is it?
It’s the difference between overflowing storage units, bulging filing cabinets, endless lever arch folders of hard copy documents OR one well thought out computer hard drive.
Many of us are probably in three stages of progress:
1. Old School/Traditional: Hard copies of all documents
2. Transition: Moving to digital storage but not quite yet ready to give up on tradition
3. Digital Success: Made the change - 100% electronic storage of documents
So why are we talking about this? Why fix it if it’s not broke?
Obviously there have to be some benefits in making the change to electronic storage - and there are many. The small amount of time you invest now in getting your document storage up to speed will streamline your operation on so many fronts. There is of course also the added bonus of real savings in time, paper, printing, postage and storage space - just to name a few.
How do I go about achieving this?
While the move to electronic storage has been fast in recent years, there is certainly no need for an expensive system when everything you require is quite literally at your fingertips. In the transition to electronic storage you need to consider two main priorities:
You want to be able to find documents quickly and easily.
You need to meet compliance requirements. In essence you need to provide document evidence, if and when required, to meet your obligations.
Lincolns has made the move to significantly change the way we deliver documents to you recently, as have most suppliers, banks and agencies. If you can create some simple electronic filing systems you will soon be in control of your document management.
Things to consider…
1. Protect and store your source documents
Definitely the holy grail of bookkeeping and compliance. Whether you store your documents electronically or as hardcopies, either way you must have a ‘paper trail’ and evidence of transactions. The ATO Website States: ‘We accept images of business paper records saved on a digital storage medium provided the digital copies are true and clear reproductions of the original paper records and meet our five rules for record-keeping’. The five rules are perhaps a story for another time, so we won’t digress.
2. Emails
For the most part these days, documents arrive by email and staying on top of your inbox is a daily challenge. It’s a great idea to create a systematic set of email folders for all supplier invoices. After you have electronically stored an invoice, consider keeping a record of them in an A-Z filing system in your email system, eg Outlook. This is a reliable backup and sometimes the quickest way of finding what you are looking for, particularly if something has been overlooked.
3. Be consistent
Most accounting packages now allow for a document upload so the source document can be permanently attached to the transaction in MYOB, Xero, Agrimaster or your chosen accounting package. Be consistent. If you choose to implement the system of attaching documents to a transaction, make sure you consistently do this. That is, if some of your source documents are still arriving by hard copy, take it upon yourself to get them into a digital format. Your accountant will love your work!
4. Transition Carefully
Make sure that you protect your documents. When implementing an electronic system, you may find it an advantage to maintain your paper system side-by-side for a time until you have complete confidence in your electronic system.
5. Back up - Back up - Back up
If you put your faith in electronic storage you must also have complete confidence in your IT system. Systematic backups and up-to-date computer security are essential. We’ve all experienced that moment of panic when we have lost data or can’t locate or restore our back up. To quote a few statistics: 1 in 10 computers are infected with viruses each month, 30% of people have never backed up their device and 70 million mobile phones are lost each year. Don’t become a part of these scary numbers and remember that Lincolns can help with advice on this element of your system if required.
6. Computer File Dividers
Think of your computer as a giant filing cabinet and start a systematic approach to setting up ‘file dividers’ as separate computer folders. This could be categories such as Financial Statements, Tax Returns, Property Settlement and Rental Statements or simply A-Z or Year. Whatever it is, you need to have it set up well before you start moving files and most of all understand your own system.
7. Key Documents
If you have gone for a recent bank loan or refinance you will understand the very long list of documents they require. If you have your key documents stored efficiently on your computer, the task of providing this information will become seamless rather than overwhelming.
The moral of this story is that you need to set up a system that makes sense for you, is accessible to you, is secure and is compliant. As someone who gets paid to be organised and likes order, I can vouch for the fact that this is no easy task. Good luck and if you need assistance to think this process through just reach out to Lincolns. We like to be organised!
