Running a Small Business

Lesson 3: Organization and Planning

Keeping simple records

Keeping records in such a way that it doesn't take much time but that you can easily find everything when you need it is a big challenge for any business. For a small business, it is even more difficult because small businesses often don't have the clerical function which, in large companies, is performed by entry-level employees. You and the people you work with are probably doing their own filing so that it becomes very important to find a balance between the time filing takes and the benefits from having a good system.

You have to keep three kinds of records. Financial records are for your own use to check the financial performance of the business and for taxes. Production records are to ensure quality. Business records include customer records, promotional material, licenses, permits, employee records etc. and are important for the continued operation of the business. In all three categories you have to keep track of documentation you generate and what you receive and, today, if you can keep the records in electronic form, you're way ahead.

Simplicity is the key factor in choosing or designing a record -keeping system and, while it sounds like a great idea to have everything in one system, I haven't been able to find anything that comes close to keeping the three types of records efficiently. One of my businesses processes a relatively small number of larger orders. I run everything through one bank account and one credit card. My entire financial records are the credit card statements and the bank statements with cancelled cheques. They are supported by receipts in one file and my invoices which I keep electronically on my computer. Those invoices have file names made up of the initials of the customer name and the date in year-month-day format (May 27, 2002 becomes 020527) so they sort themselves by customer and date. Simple, efficient and effective.

For more complicated businesses I have first hand experience with Simply Accounting and QuickBooks, two computer programs which keep financial records for small businesses and both worked quite well but are overkill for simple businesses. For production records the type of record is completely determined by the type of production - it can range from a large volume of paper records to a few computer files. And for company records you must have a customer database, employee files and a file for business records.

I started a customer database for one business in MS Access and was quite impressed with the features but found that the program was overly complicated and slow. All my customer records are now kept in MS Outlook which, from version 98 on, has great contact management features and works quickly and easily. It can also import from and export to a wide variety of programs which is a plus if you ever need to change.

I have to confess that I'm not terribly well organized when it comes to paper and I tend to lapse into the "Archeological" method of filing - it piles up and, when you need something, you dig down to the level you are interested in. This is highly inefficient and I counteract this tendency by scanning important documents and filing them in my computer with an explanatory file name. This means I can find those documents quickly and easily and I can print them out again as required.

In the end, small businesses and their owners are so varied that no one system is going to work for everyone. Our recommended resource, "Sidetracked Home Executives: From Pigpen to Paradise", gives one approach. Bottom line is that you have to keep the three kinds of records but that it shouldn't be taking too much of your time. If it is, you must simplify what you're doing.

  1  2  3  4  5  6  7  8  9