Now that you have reduced the mountain of paper spread around your office, it’s time to create an organized file system.

Most file systems are divided into three parts: Active, Reference & Archive.

Active files are those that include action steps. For more information about creating an active file, click here.

Reference files are files that need to be kept for, well, reference. Most of the files in your file system will fall into this category. Reference files include ‘Auto’ ‘Banking’ ‘Credit Cards’ ‘Insurance’ ‘Investments’ records tracking for clients, proof of a legal transaction, or information that would be difficult to locate elsewhere.

Reference files should be kept as close to your workspace as possible for easy access. A file cabinet, rolling file cart, or, for smaller Reference File systems, a mesh cube, can be used to contain these files.

Archive files are files that need to be kept for compliance reasons. They may be accessed well into the future, if they are ever accessed at all. Archive files include old tax information, old medical records, and any other file that may need to be accessed at some point in the future.

To Create your Reference File System

Think Broad First, then Narrow: Decide whether you want to file by categories or alphabetically, or a combination of both.

In a four-drawer filing cabinet, for example, you may want to use three of the drawers for client records, filed alphabetically by the client’s last name, and the fourth drawer for personnel records for those who work in your business, also filed alphabetically by last name.

You may also need additional files for Expenses, Income, Accounts Payable, Accounts Receivable, Credit Card Transactions, Business Investments, Auto Records, etc.

Create a naming method: Successful file systems are built on ease of information retrieval. Your naming method will help you locate your files when you need them. Assign groups of files, such as ‘Auto’ under one heading. Then create additional folders within that category. Under the ‘Auto’ category, you might have one folder each for each car, a folder for maintenance for each car, and a folder for AAA or other auto membership organizations. Build out the subfiles after you’ve created the main files.  

Be consistent:  Be sure to stick to your chosen groupings. In the above example, you would want to avoid having an additional file named “Toyota” filed in the T-section. Use a naming method that makes sense to you so you can remember it going forward.

Avoid Single-Paper Files: If you run across a file that seems to stand by itself, avoid creating folders for individual papers. Instead, create a broad category like ‘Important Documents’ or ‘Legal’ for these files. Single-paper files are difficult to locate later, and take up too much bulk in the drawer.

Finally, Test the System: Good file systems are all about retrieval. You should be able to find what you need within a minute or two. If you can’t, your file system may need a revamp.

Next Time: How to create an index for your file system. Need a file system set up for a Home Office, Small Business, or Corporation? Contact Lisa for a complimentary consult.