It’s the end of the year and the dreaded time awaits you — getting paperwork ready for taxes. If you’re like some, you may use an old boot box or plastic sack to store your records in. Why not make life easier on you and your tax preparer by eliminating your paper disorder and digitize your records?
You may already have the tools to go digital. With a scanner, computer, smartphone and/or tablet device, you’re ready to take your recordkeeping system to the 21st century. In the long run, the conversion to digital will save you time, money and space.
Do you have multiple paper pads and note cards with to-do lists and projects you can’t locate when you need them? Evernote (evernote.com) is an application allowing you to save and organize your digital notes and documents. It’s compatible with PCs, Macs, Android devices, iPhones and iPads. You can jot notes, capture photos and audio, save webpages and file documents. Organize your files using "tags" and notebooks. If you use multiple devices, all of your content is synced; so no matter what device you’re using your files are available when you need them. Best of all, Evernote is free; however, you can pay for the premium version and have features such as searchable PDFs, larger file uploads, view previous versions of notes and allow others to collaborate on your notes.
So you need to turn the pile of paper into digital documents? You have several options to accomplish this task. The first option is to plug a document scanner into your computer. There are many great document scanners available, but at home I use a Fujitsu ScanSnap because it fits my needs the best. I simply scan my documents, file them on the computer and shred my paper copies. My paper files have gone from a four-drawer filing cabinet down to one small desk drawer. I can easily find my needed documents, create backups and share them with others.
If you have embraced mobile technology, you can use applications on your smartphone and/or tablet device. Lemon Wallet allows you to take a picture of a receipt and add a label. Based on the labels, you can view a breakdown of your information on the mobile application or log into your account at lemon.com. Lemon Wallet also can be used to store a digital copy of all of your wallet’s contents such as IDs, insurance, loyalty and payment cards and access them whenever you need.
Another interesting mobile application is CamScanner. It allows you to take snap images of documents and turn them into PDF files. You can share them, save them and even fax them via the Internet. Although the application is free, there are some limitations. By paying $4.99 for the full version, you get no advertisements, PDF files are generated without watermarks and unlimited scanning.
Maybe you aren’t ready to scan your own documents, but you want to digitize your records. You’re in luck. There are companies you can send documents to and they scan them for you. Shoeboxed (shoeboxed.com) can scan your documents, receipts and business cards, and make them searchable, digital files. Send your paper clutter to them in a prepaid envelope. Prices range from $9.95 to $99.95 per month or $99 to $999 per year. If you pay for the Business or Executive Plan, you can have QuickBooks integration. You can also add documents to your Shoeboxed account by emailing or dragging and dropping documents to your account or by using their mobile application. Their DIY plan is free.
Track Bills and Expenses
In order to save cash, companies want you to switch from paper statements to electronic delivery. If you’re like me, it’s a pain to go to each website and download my PDF statements and make payments. Wouldn’t it be great if you could access and pay your bills all in one place? With Manilla (manilla.com), all your bills and statements are delivered automatically to one site. It supports 3,000+ businesses and allows you to manage banks, credit cards, bills, rewards and subscriptions with one secure login. It also can provide automatic reminders which can help you avoid late fees.
Where is your money going? With Mint.com you can track bank, credit card, investment, and loan transactions and balances. Mint is a free personal financial management web-based service. Create budgets and goals. Mint organizes and categorizes your spending for you so you see where your money goes and then are able to make informed financial decisions.
If you prefer a computer-based application, Quicken is a personal financial management tool made by Inuit, the same owners of Mint. Quicken has some more robust features than Mint, but not everyone wants or needs those features. Unlike Mint, you must pay for Quicken.
What about the business’s income and expenses? With QuickBooks, you have the option of buying and installing software on your computer or you can choose QuickBooks Online and pay a monthly fee. QuickBooks Online can be accessed wherever you have an Internet connection or through selected smartphones. There are many different levels of QuickBooks, so be sure you understand your business’s needs before purchasing the software. If you have a tax preparer, it would be wise to consult with them before selecting a business accounting software.
Back It Up
Backup, it’s crucial! After you have spent the time and effort to make your records digital, you want to ensure that if your computer crashes you still have your documents. There are two basic routes. You can buy an external hard drive and backup your information locally. Some people may feel this is the most secure route. However, consider having your backup data off-site. No matter if you experience fire, flood or theft, backing it up to the "cloud" will ensure your data is preserved and not lost.
There are multitudes of online backup services and there is no one-size-fits-all. I personally use SugarSync. This service allows me to pay for one account, but use it to backup multiple devices. Between my wife and me, we use three computers, two smartphones and two tablet devices. All the files and photos from each device are accessible no matter which device we are using. If I’m meeting with a client and they want a file, I pull out my smartphone and email it to them then. My mind is at ease because if our 14-month-old flushes the phone down the toilet or our 3-year-old uses my wife’s tablet as a tennis racket, we still have our data.
Do What Works for You
Let me be perfectly clear. I do not endorse or support any particular software, hardware or company. The items I’ve mentioned in this article have helped me and others I know be more productive. The applications, products and/or services best suited to you, your family and business may be completely different — but that’s what’s great about having so many choices; surely there’s something available to meet your wants and needs.
The items covered in this article are informational only and are not meant as tax, legal or financial advice; consult with your tax professional, lawyer or financial consultant for guidance on issues specific to your situation. The authors do not endorse any websites, companies or applications, and cannot attest to the accuracy of the information provided by third-party sites or any other linked site.
Jamie Yeager is an Extension Economist with the Alabama Cooperative Extension System. For more information about farm management and financial analysis, please contact your County Extension Coordinator or an Extension Specialist: North Alabama: Holt Hardin, (256) 574-2143 or Robert Page, (256) 528-7133; Central Alabama: Jamie Yeager, (334) 693-2010