In part 1 I discussed how to set up the hardcopy or paper files of the church’s Finance Office. This post discusses how to organize computer or server-based files. My prediction is that within 5-10 years almost all finance office files will be kept on a computer. I encourage you to begin moving that way as soon as possible.

The first equipment you’ll need (after a computer) is a scanner. Most photocopiers today are also scanners. Or you can get a good quality flatbed scanner for about $200 or top line color “All In One” scanner/copier/printer for about $700. You should also invest in the latest version of Adobe which allows you to work with PDFs. I also encourage you to have an account with Dropbox and to either keep all your files on Dropbox (that’s what I do) or use it as a backup system.

Regarding the file organization itself, have:

• A folder for every fiscal year and the following subfolders
  • For each month’s financial reports: put all regular financial reports in PDF form in the respective folder to easily access them in the future
  • Budget folder – all docs related to the current year budget
  • Memorial Letters folder – copies of all memorial acknowledgements
  • Stock Gifts and Non-Cash Gifts
  • Finance Committee meeting agendas and minutes
• Additional folders for other major categories such as
  • Insurance
  • Contracts
  • Tax exemption docs
  • Employee Personnel Forms (tax forms, direct deposit form, etc.)
  • Finance Office Forms (all forms related to the Finance Office)
  • Building Projects & Campaigns (one folder for each one)
  • And as many other folders as necessary to group major activities and events. Caution: do not have an excessive amount of folders or you’ll spend a lot of time hunting for docs.

How you organize the folders is up to you. I organize everything by year – the budget, the monthly financial reports, the audit info, etc. are all in the folder of that fiscal year. I can find things easily if I know what fiscal year or two I’m dealing with. I can’t encourage you enough to be passionately organized about your folders – it will help you later and save loads of time.

Lead On!

Steve

I have a simple filing system for my hardcopy (aka, paper) files in the church’s Finance Office. I’ve learned that simple is best: it keeps the staff and the auditors from having to hunt and hunting is just wasted productivity. I have a four drawer filing cabinet (lateral files are best) in which I’ve got the files for the current year (prior year files are boxed up and placed in storage until they are shredded). I’m doing less and less with paper files and moving as much as possible to electronic storage (with backups). We are in an age of transition – within a few years, paper files will be negligible.

• Accounts Payable (Vendor payments)
  • All accounts payable are in separate manila folders by vendor with the vendor name on the folder tab.
  • All accounts payable invoices have stapled together the check stub followed by the supporting docs for that payment.
  • Credit cards are in separate file folders by employee. I keep them in the A/P drawer
• Deposits
  • All deposits are in 12 folders with the month on the folder tab.
  • Deposits are placed in each monthly folder based on the date that the deposit hit the bank account.
  • All deposits have the bank deposit slip on top followed by all the docs which support the amount deposited.
• Payroll
  • All payroll docs are in 12 folders with the month on the folder tab.
  • Payroll docs are placed in each monthly folder based on the date that the payroll hit the bank account.
  • All docs related to that payroll are stapled together to make future research easy.
• Monthly folders
  • I have 12 folders with the month on the folder tab.
  • Each of these monthly folders has anything that doesn’t fit into one of the previous categories. Typically, this includes: journal entries, bank reconciliations, and investment statements.
• Annual Files – there are files which are only one folder for the year. These include
  • Voided checks
  • Annual budget
• Permanent Files – one of my drawers is for files that cross over fiscal years. This includes:
  • Contracts – I have a folder for each vendor. Somewhere on the folder I put when the contract expires. I also keep this info in an Excel spreadsheet to see at a glance when contracts expire.
  • Construction – any building info which will be needed over the course of several years is in a separate folder(s) according to the project.
  • Insurance – contracts and premium payments are kept in separate folders because this is kept forever (see records retention post)
• Employee Files
  • Current employee files are kept in separate folders with the employee’s name on the folder tab
  • Former employees’ folders are boxed up and kept in a separate and secure location. The Department of Labor says you only need to keep those folders for three years after the employee leaves but I recommend keeping them for 10 years in case there is legal action by the former employee.

Once you are organized and get into a routine, then this system works quite well. I learned this from one of the Final Four accounting firms so it has passed muster.

Prior year files are in boxes on shelves organized by year and by contents: boxes for accounts payable (bills & invoices), a box for the monthly folders, a box for deposits, and a box with any other file (or fit those into one of the previous boxes as possible).

Lead On!

Steve