Contracting Business Buried in Paperwork? Here’s What You Really Need to Keep

When you put a lot of information in writing and start to build some long-lasting customer relationships, you might end up with a whole lot of paperwork. With these tips, you will know how to decide what to save, the safest methods of discarding unneeded documentation, and what you really need to print.

What to Keep

You do have some flexibility in deciding what you want to keep. It all depends on how much space you have available. However, there are five broad categories of documents that you should keep organized in some sort of filing system:

• financial documents
• business papers
• legal information
• employment records
• client information

You don’t have to preserve every little note you sent a client about their project. You might decide to save some emails relevant to the project at hand. But, you should definitely maintain anything specific to the regular running of your business.

How Long to Maintain Records

Thankfully, you don’t have to keep everything on file for the entire time that you have your business. That said, you need to hold onto the really important stuff for a decent amount of time. Consider these standards for your filing:

• Tax documents: 7 years
• Financial Records: 7 years
• Human Resources: 7 years
• Licenses and Proof of Insurance: Indefinitely

Hanging onto some information related to your business is just good common sense. Experts recommend keeping applications for employees you choose not to hire for at least three years. This approach helps protect you from future liability. However you choose to organize it, make sure everything is easy to find.

Paper vs. Digital

You need to have a repository for your important files. That doesn’t mean you have to print out everything. As a good general rule, almost anything can be scanned or kept in a digital format. For items you really need to print, think about what would happen if you lost the digital record, or if the company maintaining the account lost their digital record. For example, it would be a serious problem if California accidentally lost record of your active license, and you couldn’t prove you had it. It would be similarly stressful if a lender lost track of your payments. As such, you may want to keep printouts of these records, just in case.

Ensuring Regular Backups

Your digital records are only as good as your backups. If you have a small contracting business, you might do all of your computer-related tasks from one laptop you sometimes take to the jobsite. Losing that laptop due to damage or theft could mean that you forfeit all the information on it. Water or fire damage at your work location could create the same kind of problem. Set up an automatic backup system for your digital files that is stored in a different place. There are several programs that allow you to store information in the cloud. That way, you don’t have to worry about preserving a backup hard drive in another location.

How to Properly Dispose of Documents

You have probably heard people say that once you upload something online, it’s there forever. This may also be true to some degree for all of your digital files. Paper documents are pretty easy to eliminate, preferably through shredding or burning. Digital files that don’t contain any sensitive information may be easily deleted. You want to ensure that any digital records with important account numbers or bank information are encrypted or completely destroyed. If you decided to sell an old computer when you buy a new one, you may be wise to format the old hard drive. This minimal effort in the management of your files could help protect you and your clients from theft.

Record keeping can be the bane of any small business, but you can make it easier. With these tips, you can reduce your paper load and organize more cleanly. To learn more about how to start your contracting business, contact us at CSLS today!