Helpful Record Keeping Tips on How to Set Up File Folders

For Electronic Files and Folders

Here’s A Good Way to Set Up Your Electronic File Folders

I use a Windows PC and here is how I set up my electronic file folders. Keep in mind that I’m setting these file folders up with an objective of keeping all my accounting records in one folder for each year. To do this I have established levels. These levels are like folders within folders within folders.

Click on the folders icon on the bottom left of the computer screen (if you hover over the icon you will see that the icon is called Windows Explorer)

Click on “Documents” (or My Documents)

Near the top of the screen you will see “New Folder” – click on that

A new empty folder will pop up and here’s where you name your new folder.

Now I repeat this process until I have something that looks like this:

My Documents

My Bookkeeping Records
2023
Financial Statements
Income Statements
Balance Sheets
Trial Balance
Bank Statements
2023January
2023February
2023March
2023April
2023May
2023June
2023July
2023August
2023September
2023October
2023November
2023December
Payroll Reports
W-2s
941s
Monthly Wage Reports

For Paper File Folders

Start by Determining Which Names to put on Your Paper File Folders

I use letter size, third-cut file folders. In the picture above, you can see I used all the left cut folders to set up my miscellaneous folders and I will use the middle cut to set up the individual customer or vendor names so they are staggered in the file cabinet. I like to use them this way instead of a pattern of left, middle, right, left, middle, right because it is so much easier for me to add new folders and not have to re-alphabetize them.

I like to color coordinate my folders, so let’s say all my customer names are in purple folders this year and all my vendor folders are in orange. Next year I may have all customers in pink and vendors in green. You get the picture.

If you’re brand new in business just set up a miscellaneous folder for each letter of the alphabet as shown above. Then you can add folders during the year if you find a customer’s (or vendor’s) invoices are taking up too much room in the folder.

Repeat Each New Year

Near the beginning of the year, you can remove the old folders and store them in a banker’s box with the year of your records clearly identified on it and repeat the process.

Supplies you will need:

30-to-page blank address labels
Third-cut letter size file folders

You get the idea. You can make as many levels as needed. All you need is to put some thought into it. Hopefully I’ve given you some ideas on how best to keep your records organized.