How much of a physical paper trail do you keep?

[thirdistheonewiththehairychest]

I have recently taken over the role of 'finance manager' in a small business (12 employees) and have been tasked with bringing the company's procedures up-to-date.

There is a lot of scope for improvement as everything has previously been done manually and involved a lot of paper. I'm not sure to what extent it's wise to go completely paper-free though.

Can I ask what other people's workplaces do regarding keeping records of things like bank statements, VAT returns etc. It's completely pointless printing them out and sticking them in a folder isn't it?

I work in accountancy practice and I've worked in a couple of businesses. I totally agree it's a pain having paper files and people are moving away from it.
Do make sure your files are somewhere you have control of though. For example, if you closed your bank account, you might lose access to the statements, so you must download them. And if your IT company went bust, what's your plan to keep the data? How secure is the data? I guess you use decent software like xero with all your invoices and receipts backed up online. If you have an external audit that's likely to be sufficient for the auditors also and may even make it easier for you and them.

Thank you, that's really helpful!

As long as you have a sensible filing structure and use a file name system there is no reason you can’t just keep electronic copies.

Actually I always keep paper bank statements in a file, if someone still gets them sent by the bank.

I did a 7 year VAT reclaim recently, and they had one file of paper invoices per year. Was actually helpful.

In all of my workplaces since approximately 2003 or so, everything has been digital. However some of the scanned documentation e.g. invoices, was put into physical storage as a backup, then destroyed after 7 years (legal/ revenue requirement to hold documentation in my country).
Not been involved in finance processes in a few years now but I would guess that everything is digital now.
Obviously you need to ensure that the data is safe and secure, easily retrievable, stored in a logical way, GDPR compliant etc etc.

I work in finance and we have to have copies of everything going back 7 yrs to meet various legal requirements. These do not have to be physical paper copies but can be digital.

I would ensure you have as much as you can stored electronically with external backups available. These backups should be outside of any service provider you may use as you don’t want to lose them if you change your contract or if they go bust.

Everything is digitalised, rightly so. Bank statements digital, in a file. All Paper invoices scanned and logged via AI, eg via Huddoc onto xero/QuickBooks/Sage. So all digitally stored. But being completely paperless is hard. But I do love an old school flicking through a years paper bank statements, flicking through a file of a years supplier invoices.

ACCA here in industry. I keep everything electronically for seven years per statutory obligations. Then for my own benefit I produce a physical year end file when I pull together statutory accounts with lead schedules and paper copies of closing bank statements, fixed asset additions, large prepayments etc. ie the kind of things you’d want to have to refer back to.

Just be aware that if you file stuff in online systems there is often an auto delete if not 'opened' in a year.

I used to be audited by the Audit Office but everything we did was electronic so I kept all paper records of checks, I had spreadsheets of data showing checks and all evidence was copied and emailed into the central email system so that it could be recovered if needed for an audit. That includes copies of spreadsheets as it stands on any particular day to capture data at that point in time.

I too like a good YE file.