Organization and your Home Based Business

We have been talking at length on techniques on how to make your home based business successful. Today we are going to talk about organization and how that can also make you more successful. Organization can take several different paths, today we are going to talk about organizing your work area. This is most likely an issue for may business owners and if you don't have a plan in place, you may be very unhappy with your situation.

For me, paperwork is my major downfall. I am organized in many aspects of the business, but when it comes to paperwork, well, controlled confusion is more the norm. When you are running your own home based business, paperwork can make or break your business. We are not only talking about filing appropriate taxes, paying bills, but also recording sales, purchases and expenses. Everyone should have some type of tracking system, even if it is a shoe box filled with receipts, but you do need to decide on some type of organization system. As you are trying to decide how to organize your paperwork, it is critical to be sure that the plan matches your particular organizational style. Just because the person down the road has this awesome filing system that works great for them, doesn't mean it is going to work well for you.

A shoebox filled with business receipts may be your best version of organization. The reason it is critical to have your business paperwork organized is because at some point in time you will be asked to validate a particular sale, purchase or expense. I am not just referring to an audit, but there may be times when a customer contests an invoice, or worse the bank challenges a credit card receipt. You need to be able to get your hands on the appropriate paperwork in a timely manner or you risk losing the sale. It is always such a satisfying feeling to be asked for information on a particular business transaction and to be able to produce the needed documents in a short period of time. How many times have you been asked to find a particular piece of paper and you find your heart starts racing because you are not sure WHERE that piece of paper may be.

Organization of your paperwork is also critical if you have warranties that have to be maintained. You may warranty work or products to customers, and you will most likely have warranties on the products you use. It is critical to be able to access that information quickly. If you are not a great person for keeping paperwork neat, one of the simplest methods I have seen is to have a shoebox and start putting all paperwork in it, organized by date. That way, you know all the pieces of paper are in one place, and if you knew the basic time when the event occurred, you would not have a difficult time locating the necessary document.

Another, slightly more technical method is to have four file folders. One is labeled sales, another is for inventory purchased, the third is for business expenses and the last is for any physical assets (tables, computers, programs) that you have purchased for the business. This way, every time you make a sale of either a product or service, you can place that sales receipt in the sales folder. Any time you purchase something to be sold for the business you put in the inventory folder, and anything else you purchase for the business (including office supplies, meals, meeting costs, utilities etc.) are put in the expense folder. Again, keep these receipts in date order for ease of filing later on. The physical asset folder will most likely have the least amount of receipts, but if there is a time that you need to find that computer warranty fast, you can go to that folder and produce the warranty in record time.

By having this slightly more detailed system of filing, you end up being able to sort through paperwork much faster. By the end of your fiscal year you then have the basic categories of revenue, costs and expenses already sorted for your accountant to handle. What we do is every evening, we empty our pockets and place the receipts in the appropriate folder. Then, when we have time, the recording of the information goes much faster.

The best part about this simplified system of filing is that you end up not having a desk covered in paperwork. How depressing is it when you walk into your office only to see your whole desk covered in papers? You may even end up shoving that pile of papers off to a corner of your desk so that you can get to work on the computer or telephone. How many times have you just added to that pile of papers, stating at the time you NEED to get that pile of papers under control? Think of how much more empowering it would feel if you just had those 4 folders on your desk or in your desk drawer with all the receipts neatly placed in them. Then you don't have the distraction or frustration of knowing that you have to get to the paperwork pile, the sorting is already basically completed. You can then focus on the main business at hand, making your home based business more successful than it was the day before.

There are more detailed methods of keeping your paperwork, but if you are the type of business owner that doesn't have a huge staff working for you, simplicity is key. If you have any questions regarding filing, or how to manage your paperwork, please feel free to contact us a hawgwash1@yahoo.com. We would be more than willing to assist you any way we can. If you are interested in starting your own business, check out our website, http://www.hawgwash.net/ for ideas. We are (almost) always available for questions.

Until tomorrow...