Regardless of the size of your business, you are likely to accumulate a lot of financial records as you operate. Because you may need to refer to these documents for financial planning, collection or tax purposes in the future, it is important to keep them safe and organized.
In the past, all businesses kept their important financial documents in paper form. Although you may still choose to keep hard copies of some or all of your documents, this is no longer the best method of organization and storage. Paper documents degrade over time, and they also take up significant space in your office or warehouse. In addition, they can be destroyed easily, leaving you with no evidence of important financial transactions. For this reason, it is important to keep digital copies of all of your documents, either instead of paper documents or as a back-up for your paper documents.
If you are keeping your digital files in one location only, they may be vulnerable. A single virus or other computer failure may cause all of your files to be destroyed in just one day. To prevent this type of catastrophe from destroying your important records, it is important to keep extra digital copies in a different location, such as in a secure cloud storage site or on a remote hard drive/USB drive.
Even if you have backup copies of all of your documents on another server, it is still important to protect your financial records from viruses, hackers and other security breaches. Financial documents often contain sensitive information that could be used against you or your clients if it falls into the wrong hands. Keep your files safe by ensuring that every storage location is equipped with antivirus software, passwords and other such security measures. Test and update these security measures on a regular basis to ensure that they are as effective as possible.
Partridge and Associates CPAs have over 40 years of strategic tax planning experience for Scottsdale and Phoenix small to mid-sized businesses. Contact us today for a free tax minimization for your business at 480.990.2727 or send us a message via our contact page.