Data storage in 2021
The saying goes, “for every minute spent organizing, an hour is gained.” When we take the time to file things correctly and effectively, we save ourselves heaps of time and headaches in the future. Here, we share the simple steps you must take for data storage in 2021. These are our best bookkeeping practices for your bottom line! And of course, don’t worry, there’s an option to simply outsource it all to us if you’re looking to gain back hours and some serious sanity this new year.
What is the benefit to bookkeeping?
Because your business records prove your business transactions and activities, you’ll want to have these files handy. In order to sustain and grow a successful business, you must have organization on all levels. This includes your business records especially.
You may already have a fairly effective records management system. But, just to be sure, ask yourself the following questions:
Does it take more time than I’d like to look up financial figures?
Do I trust my bookkeeping records are accurate and up-to-date?
At any time, could I furnish over documents for tax preparation with confidence?
If there was a financial audit, is my business compliant with all regulations and rules?
If you’re unsure about any of the answers to the above, we are here to help! From cleaning your books to keeping them, we are capable and competent when it comes to all things business accounting and bookkeeping.
How long should I keep business records?
When it comes to record keeping, you cannot be too safe. We understand that hoarding a ton of old files isn’t ideal so we recommend some other options available to you for digital recordkeeping that supports your growth and sustainability.
IRS regulation says 3-5 years. We suggest 10.
With the Internal Revenue Service pursuing audits when things seem “off” or unaccounted for, it’s no wonder they recommend maintaining your business records on hand for a few years. IN fact, they say to keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. They add, keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
Certainly 3-7 years can seem like quite a pile of paperwork, so this year, focus on starting more sustainable and organized ways to keep this data on-hand. Before you know it, you’ll be able to years prior.
At Two Sense, we highly recommend maintaining records for 10 years. This is for a variety of reasons. Firstly, if an employee suffers a work-related accident or files a claim against the business, it’s advisable to retain your records for up to 10 years after the claim is resolved. Secondly, If you claimed a deduction for a given year, you can change your mind within 10 years and claim a credit by filing an amended return. Thirdly, one of the most important facets of success is business review. Keeping records for 10 years allows you to span a decade of data. This way, you see patterns to adapt or adopt to take your business to the next level.
What are the best data storage options for 2021?
The digital world is always changing and coming out with new and improved tech and software. That said, at this time of writing, we want to share our most credible suggestions for data keeping for your business from this point forward.
QuickBooks has options for record keeping.
We are big fans of Quickbooks. Not only do they have a ton of different subscription levels that meet business budgets, but they also offer data storage. This is one of the main advantages of QuickBooks Online. Their online version stores your data in the cloud so that it can be accessed by multiple users anywhere, anytime. This makes virtual bookkeeping by yours truly as easy outsource option!
Beyond the convenience of having records available anywhere and anytime, your files are also secure. QuickBooks Online uses redundant back-up, and for extra security, the data can be downloaded and stored locally as well. Conversely, when you opt for data solely on desktop software (think a local computer) you run the risk of leaving your accounting data far more susceptible to being compromised.
Google drive is another option available for data storage and access.
The very user-friendly Google Drive offers the ability to save and store files while also collaborating with working documents. Google Drive gives you the power to upload and save a range of file types — documents, photos, audio, and videos — to Google servers, or the “cloud.” From there, you can choose who has access to edit or view such documents and the ability to modify as needed.
Business Insider summed it up best when they shared these key features of Google Drive:
- Storing files: By default, Google gives you 15 GB of free storage space across Gmail, Google Drive and Google Photos. If you ever hit that limit, you can always pay for more space by upgrading to a Google One account.
- Sharing files: Files are private until you share them. But at any time, you can invite others to view, edit, or download files and documents.
- Accessing files from anywhere: Access files from any smartphone, tablet or computer. Offline access is also available.
- Comprehensive search: Drive can recognize images and even text in scanned documents, making searching for files even easier.
- Secure storage: Drive files are protected by an AES256 or AES128 encryption, the same security protocol used on other Google services.
Good old fashioned accordion files can still be a valuable asset for record keeping.
In the days of minimalist challenges and Marie Kondo, having a “paperless” filing system can seem incredibly tempting, however, there are some documents that simply must stay in a hard copy format. The good news is that all of the records you maintain in an accordion file can also convert to digital documents as well.
Before you convert new files to a digital office workflow, make sure you have hard copies in an organized manner. We recommend a secure, on-the-go option in the event of an emergency. For example, one that could damage original files or perhaps, a timely meeting where important papers must be seen in real-time and potentially absent of WiFi.
Get help with your books and data storage for 2021 and beyond.
Two Sense Consulting, LLC, is here to help small business owners focus on their purpose and passion by maximizing the way you spend time and money. Effective and easy-to-maintain recordkeeping practices are a must to accomplish this. Feel free to take advantage of our FREE CONSULTATION! Call, message, or email us so we can set up a FREE consultation and let’s see how we can help you!