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Feeling sick at the thought of yet another financial year ending? Received a letter from the taxman? Have more than three years of returns to complete? Don’t worry, you’re not alone. It will take a bit of commitment and some know-how, but you CAN get all your paperwork organised for hand over to the Accountant. Don’t wait another year!
Follow these practical steps to get your paperwork in order today:
Set Up
Dedicate a lidded plastic box or filing cabinet drawer (yes a whole drawer) to the job. Label a new foolscap sized envelope for each financial year you are missing a return. Use this format: 1 July 2002 – 30 June 2003. Use large clear writing on the front of the envelope. One envelope for each financial year.
Gather
Round up all your paperwork Handle ONE piece of paper at a time. Uncrumple each one, and highlight key information: date, total claimable amount, method of payment, supplier. Place in the envelope you have labeled for that year.
Decide
Consider taking it to your Accountant at this stage. Depending on volume, time available and stress it’s causing you - you may wish to leave the finer level sorting to them.
Order
If you chose to do your own finer level sorting you will need to: Divide the contents of each financial year into sub categories: income, expenses and bank statements. Do this by using a new envelope or plastic sleeve for each sub category. Tackle one year at a time – and keep all the sub category envelopes/sleeves in the bigger envelope If you are really enjoying this, put the receipts in date order - most recent at the top, clip them together and slip them back into their ‘sub category’.
Avoid
Future Backlogs Start with a clean slate and put a system in place now for the future: Set up a lever arch folder with appropriate categories: income, expenses, bank statements (one section for each different account) and store cards. For small receipts glue them onto an A4 sheet of paper. Keep all receipts out of the sun and photocopy any particularly prone to fading. Use a hole punch and file them into the folder under the relevant category. By adding each document as it arrives, the most recent last, your folder is automatically in date order at the end of the financial year. When your past years paperwork comes back from the accountant, the envelopes can be sealed, hole punched and kept in lever arch files marked with the appropriate dates.
Remember your aim - To get paperwork into good enough shape to pass to the Accountant. Don’t block yourself by saying “I can’t find that receipt for a $100 textbook from 1999”. At the end of the day it’s better to get the whole picture to the Accountant and get the job done. Remember, more often than not - “Done is better than Perfect” It took months/years (decades?) to create your current situation. And it’s going to take time to get it sorted. Chip away at it and you will get there. If the mere thought of starting causes nausea, seek help from a Professional Organiser or other appropriate business.
Published in Your Money, Cairns Post Money 2 June 2008
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