You are busy running your business. You want to think about that, not manage paperwork. Without looking, you end up drowning in the stuff. Your office is either full of it, or you are paying lots of money to store it. You then find it is hard to find important paperwork when you need it. How can you get to the promise of Nirvana, where this becomes easy? Well, perhaps Nirvana may not be possible, but at least you can achieve management of paperwork that doesn’t make your life hard. The solution is to go electronic and create a paperless office.
Types of documents that you want to be electronic
You will create or receive many documents in the course of running your business. Key documents include:
- contracts, especially those with signatures on them (executed contracts). Drafts can also be handy
- invoices, purchase orders and receipts. Accountants call these “supporting documents”. They provide evidence to support your accounting records. Tax authorities may require you keep them in order for you to make allowable deductions for your expenses
- HR documents such as employee agreements, any advice slips given (pay, pension advice, superannuation), end of year documents. You should keep copies of all of these in case of any disputes later
- anything filed or lodged with tax authorities. Again, these may be needed if the tax authority audits you or has any questions. Don’t rely on obtaining the copy you have filed with them. Keep your own copy
All of these documents can be important. You are unlikely to know which ones will be important later. Situations can arise where you must be able to access these documents. You need to be able to both easily store and access them at any time for your paperless office to be effective.
How to make documents electronic?
In 2020, the electronic storage format of choice is the PDF. There are quite a number of choices in converting documents to PDF. For your paperless office to work, you need to capture documents in various situations.
Scenario One: Scanning in the office
For your physical documents in the office, you can scan to PDF. You will need a document scanner to do this.
Most multi-function printers include the ability to scan documents. Use the document feeder for page or sheet documents in A4 or US letter size. This process will be faster if your device supports duplex (can scan both sides of the page).
If you have large paper documents, or need to scan very quickly, consider a dedicated sheet scanning device. Such devices include the Fujitsu Ix500 or the Epson-500w. They scan duplex, 20+ pages per minute and support scanning to PDF.
Most scanners support OCR (optical character recognition). You should turn this feature on. It allows you to copy and paste content from your documents. It also makes them searchable.
What about scanning resolution? 300 dpi is generally sufficient. If you scan at a greater resolution than this then you will have many large, bloated PDFs. If you scan at a lower resolution, you may find handwriting and signatures illegible – presuming it was legible on the original!
Scenario Two: Scanning out and about
Your smartphone has a camera. This, coupled with scanning apps, allows you to scan documents in the field. Apps typically breakdown into two categories: Receipt/Expense apps and Scanning apps. We recommend you focus on scanning apps as they deal with both documents that are related to expenses and those which are not.
Key features you want from phone scanning apps:
- Output to PDF
- OCR features built in
- Store to phone/SD card or direct upload to cloud services such as Dropbox or Google Drive
Apps you may wish to consider include Clear Scanner, Smart Receipts or Office Lens.
Scenario Three: Printing to PDF
Some documents are already electronic. These include emails, Word documents, presentations and spreadsheets. Working versions of these documents should be kept in their original formats – otherwise you may not be able to continue working with them.
When documents are in a final state, print them to PDF. Why? PDF is a stable display format that works well over time. Documents created 20 years ago still display correctly. A Word document created 20 years ago may or may not work. At one stage, it was observed that every new version of Word would break the equation editor data saved in the immediate previous version. Rather than putting your documents at risk of this, keep a PDF copy.
Sorting and storing your paperless documents
Where should I store my documents?
All your electronic documents need to be stored somewhere. Here are some basic choices:
1/ On your local computer hard drive
This is simple and may appear convenient. Trouble could arise however, when time comes to share files with others. If you are working in a multi-person workplace, you can share your hard drive using local networking. This can become a tangled web if many people do this. When you backup – I presume you do backups – you have to backup multiple places.
2/ Local network storage
NAS devices can be used to give network drives that can then be accessed through the office, or even remotely through the internet. These devices are dedicated to managing your storage. Some of them have built in automatic backups so you don’t need to think about it
3/ Cloud storage
Services such as Dropbox, and many others, allow storage of files and folders in the cloud. They also allow content to be synced between the cloud and local computers/phones/NAS devices. Be careful however, not to use cloud storage as your sole backup solution. Changes made to files in the cloud that are synced will replicate across all synced devices. Think about what happens if you delete your synced “Documents” main folder – it will replicate this deletion in the cloud.
Some services do have history features, allowing you to revert to previous versions of files or undo deletions. This is helpful, but does not replace the need for off-cloud or somewhere-else-in-the-cloud backup.
4/ Collaboration cloud services
The best example of this is Google Drive. It is not so much cloud storage but a collaboration tool. Text, spreadsheet, etc type documents can be worked on by multiple people at the same time. The key is you need to use online applications provided by the service (think Google sheets for spreadsheets). These services work best when you use the provided tools, but not so well when you want to sync them with local storage and then use non web applications.
How should I organize or sort my documents?
Once you’ve decided where you store documents, you need to decide how to organize them. In any business of non-trivial size, there may be many, many documents in your paperless office. It is important to have strategies for file naming conventions and folder organization that meet the needs of your business. Check out this article on how to organize your documents. These strategies work no matter where you store documents. You’ll also have an uncluttered computer desktop screen.
Once you are storing and organizing your documents, the time will arise when you need to find and access them. If you are using a structured file naming and folder organizing strategy, this will be much simpler. You use your chosen structure to drill down to a smaller set of files to find what you need. In many cases, by using either time based or subject based folder names and the file name itself will get you to what you need.
For situations outside of your document organization structure, or where you don’t have one, you’ll need a search tool. These tools work like Google Search. You provide one or more search terms and the tool will then search your documents for matches. Many of these tools have the capability to search not only the filenames of your documents but the contents as well. This is where you will get a great deal of benefit from having searchable OCRed PDFs as files in your paperless office. Your search tool can read the contents of these scanned files and be able to use them in forming search results.
Tools that you could consider using include:
- Windows: AnyTEXT Searcher, TextSeek
- MacOS: Spotlight
- Linux: Recoll
How long to keep your documents in your paperless office?
Once you have stored your documents, you’ll need to keep them for some time. How long depends on the type of document, whether you have financial audits or other external requirements
- Many tax authorities accept paperless offices. They do not require you to keep paper copies of documents. Indeed, many documents never have been in paper at any stage. Check your authority’s requirements. For the US IRS, document requirements can be found here. For the Australian Tax Office, check here.
- If you used a document to support a tax return or report, keep that document for at least as long as the tax authority has the ability to review or audit that return. In many cases, this will be between 5 and 7 years. The exact amount depends on your tax authority. An area to watch out for is capital items. You may need to keep related documents for the life of the asset, and then an additional 5 to 7 years. In some cases this means keeping hold of certain documents for decades
- If you are subject to financial audits or reviews, keep all documents that support this for 7 years
Even in the cases where you need to store documents for many years, they don’t take up physical space. Hard drives or even cloud storage is much cheaper than renting more office space.
You don’t need to be overwhelmed by documents in running your business. Take control by going paperless office. Start by collecting all relevant documents. These include contracts, invoices, HR documents, tax returns/reports, and anything else that is important to you, your suppliers, customers and employees. You can then:
- scan them with OCR, or print them to PDF for reliable storage
- store them with appropriate storage services with a structured organization approach
- search and find what you need with search tools that can read text in your documents
- keep them electronically as required, but much more cost effectively than physical document storage