Organizing your financial records will help you pay your bills on time, avoid damaging your credit with late payments and make tax time easier. Tossing receipts and bills in a box may help you keep your records in one place, but it will cause you headaches as you try to sort through that mess of paperwork to find an important document. Spend an hour creating a financial record-keeping system at the start of the year to help keep your finances on track.
To ensure you pay your bills on time, create a payables file. Put bills that are coming due in this folder and check it each Monday to make sure you don’t miss any payments. Some bills won’t be due for months, so create a file with 12 monthly sections. Place your bills in the file in the order they are due. Put mail dates on them -- not due dates -- so you don’t accidentally pay them late. If you pay any bills online manually, meaning the creditor or vendor doesn’t provide an automatic payment option, hand write a note that includes the payment due and pay date you want.
Once you pay a bill, put it in a “Paid” file. Instead of ordering this chronologically, order your bills by type. This will help you when tax time comes, especially if you have a home business or prepare monthly expense reimbursement reports for your job. Group bills into categories such as home, debt payment, business and other regularly occurring expenses.
If you have developed a personal or household budget, you might want to keep your receipts and bills organized chronologically to make updating your budget easier at the end of each month. Place your records into a file divided by the months of the year. As an alternative, if you update your budget in a spreadsheet as bill are paid, organize your hard-copy file by expense type for easy reference when you need a particular bill or set of bills.
If you’ve paid a bill online, put a handwritten note in your “Paid” file in the proper category, or place credit card and bank statements in your file at the end of each month. Give each credit card and bank account its own section in your file. If you’ve signed up for paperless statements, print online statements each month and put them in your file for quick reference. A three-ring binder with divider pages is an inexpensive way to conveniently organize credit card and bank statements.
Using a simple spreadsheet, such as Excel, or simple accounting software such as Quicken or Quickbooks, you can organize your bills and receipts for easy budgeting, tracking, bill paying and tax preparation. Enter all of your income and expenses as they occur to prevent inaccurate records that occur when you lose paper bills and receipts.
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.