How to Implement a File System in the Accounting Office

by Sheila Shanker; Updated September 26, 2017
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Accounting employees handle a lot of paperwork and without a filing system, the office can quickly become a mess. It's common for accounting departments to have many filing cabinets, including locked ones, to safeguard payroll and other confidential information. Access to financial files and data should be limited -- offices should not be located in public spaces. Implementing a filing system in the accounting office poses certain challenges, but it can be done successfully and increase the department's efficiency.

Step 1

Set up two kinds of files. One filing cabinet or drawer is for daily files, which are usually stored away after year-end. These files include most of your expense and income items. The second type of files relates to storage of permanent or long-term items that need to be accessed over time. Examples would be files for policies and procedures, contracts, fixed assets, insurance policies and other documentation that cannot be hauled away after year-end.

Step 2

File documentation by type. Expenses are filed separately from payroll and other areas of accounting. Don't mix and match. If certain transactions belong to more than one area, such as expenses and fixed assets, make copies of the paperwork and put the documentation on both files. Expenses can be filed alphabetically, by vendor names, while fixed asset files can be classified by purchase dates. Depending on your business, income backup is filed by date of receipt or date of deposit to facilitate bank reconciliations later.

Step 3

Use different colors with your files. For example, you can file all your expenses in red folders, income in green and contracts in yellow folders. If you're looking for an income item, go straight for the green folders, saving time and energy. If you see a red file laying around, you can move it to the correct filing cabinet with no problems or delays. Color coordination makes filing easy.

Tips

  • Establish a hot file where you put items that need your immediate attention and keep that on your desk.

About the Author

Sheila Shanker is a certified public accountant based in California. She writes online courses for professionals seeking CPE hours and has also published the book "Guide to Non-profits: From the Trenches." Her articles have been published in national magazines such as the "Journal of Accountancy," "Architecture Business and Economics" and "Veterinary Economics." Shanker holds a Master of Business Administration.

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