Stop hoarding the paper. You’ve got more important things you need the room for, like stockpiles of food, diapers, and medical supplies.
I work with a lot of preppers and small businesses, and one redeeming characteristic of almost all of them is that they hoard 10-20 years of paperwork just in case the IRS ever comes calling.
Or if they need a new business plan.
Or if they just randomly need a certain piece of paper in the spur of the moment.
If this isn’t you, please pass this on to someone who needs it.
If it is you, read on. I have a solution.
But first, a disclaimer. I am not an accountant, financial expert, or professional bookkeeper in any regard. All my information is simply advice that could either make your life more awesome or put you in a Russian gulag. Do not regard it as professional advice.
As I write this, I think of one of my chief clients. He owns a construction company and has about a dozen large filing cabinets plus a dozen more boxes full of papers spread out all over his offices and attics.
I’m sure you could think of something to do with all that extra space, but first let’s get rid of the paper piles.
As a disclaimer, I do want to add that there’s little chance you’ll ever get audited. In 2017, the IRS reported an average 0.5% chance of an audit. However, you may get letters from time to time requesting info. I’ve never been audited, but I’ve answered IRS requests for information probably a dozen times over the years. For either one, you better have the right records.
Let’s get started.
First off, it’s ok to have digital files for the IRS. You don’t have to have it all on paper.
- For simplicity’s sake, here’s a blog that covers the IRS info-
The Expensify Blog - For nerds like me, here’s the IRS doc that say it’s so- IRS Publication 552
Now that you know it’s okay to get rid of all that paper, you need a plan.
Ditch the Paper Challenge
Equipment you’ll need:
- A computer with enough power to scan a lot of docs. I know some of you are still limping by with old computers. If you’ve needed an update for awhile, here’s your chance. I suggest a laptop. You’ll see why when we get into the plan.
- A dedicated sheet fed scanner. My printer does this just fine for me, but you’ll want a small dedicated one for this task. These run from affordable to really expensive. For small businesses, I recommend the Epson Workforce series for affordability. There’s the ES-400 for an office or the Epson ES-50 for ultimate portability.
- Portable hard drive for safe storage. You can buy multiple terabyte drives really cheap and small now. You can find cheaper ones on Amazon, but I recommend name brand items for these, like Western Digital or Seagate. If it’s a Chinese knock-off, there’s no telling what else is hidden into the programming.
- Shredder. The cheap one from Amazon Basics is fine for this.
The Plan:
- Come up with a method for organizing the files. Almost always by year, but figure out what additional file names you’ll need. Go with common sense and whatever makes it more searchable for you.
- Create instructions. Make videos or written instructions that anyone can follow. Cover everything, including how to use the scanner, organizing files, how to dispose of paperwork, and anything else you can think of. Make it so easy that all you have to do is hand off the instructions to a new employee and tell them to “Go forth and prosper!”
- Hire a teenager (or suitable low paid employee). My kids do jobs like this all day long. Pay them more than minimum wage or a set price depending on the amount to be scanned, give them the opportunity to work from anywhere, and they should be happy.
- Scan through all your stored files to get rid of the hoarded stash. Then do it again every year.
Quick notes to remember:
- Only get rid of the stuff you’ll likely never need. Keep what we refer to as Tier One paperwork. This includes property and auto titles, birth certificates, marriage licenses, etc. Scan it and place the originals in the safe.
- Keep the current year’s files on paper. Maybe last year’s files too, if you have the kind of biz that needs it handy on paper.
Scan – organize – shred – repeat. It’s that simple.
Go forth and make more room in your attic!
Dr. Redbeard