Please don’t think I’m calling you “asshole” to hurt your feelings in any way. I was a jerk when I started setting up my files. You have to force yourself to do it NOW, right at the beginning! Many of the companies collapsed simply because they lacked organization in their basic accounting business practices. Do not be one of them! As a small business, you don’t have to do much at first. Here’s how to set up your files from scratch: 1. Get out a hanging file folder and a tag of any kind. (You can buy hanging folders and labels for them at K-Mart, Wal-Mart, and any office supply store.) 2. Type or print “Receipts” on the label and place it in the hanging folder. 3. Now, place 5 MANILA file folders inside the hanging file folder (which you labeled “Receipts”) and label each of the MANILA file folders with the following headings:

has. Advertising

b. Shipping costs

against office supplies

d. Office Utilities and Rent

me. Miscellaneous You now have a large hanging file folder with 5 separate manila file folders inside. Carefully place your hanging file folder in your metal filing cabinet or cardboard bank box. (A banker’s box can also be purchased at any office supply store and typically costs about $4.) Now, wasn’t that easy? Some of you reading this will think I’m trying to insult your intelligence. This is not my intention. This report is broken down simply, step by step, so everyone can understand it, regardless of their prior knowledge and experience. Remember, some people have never worked in an office in their entire lives. What seems simple and accepted to some of us may be something that another person would never have known. Okay, let’s go back to where we were. You now have a complete master file and we are ready to create another one just like it. This time we will name the hanging file folder “Income” and label 3 manila folders within it with the following headings: a. Orders completed and shipped b. Inquiries and Correspondence c. Open orders still pending See how easy it is? From now on, just create another folder when needed and your files will always be easy to maintain. (Once you understand this concept, you can easily think of getting a computer. A computer organizes your information the SAME way. Trust me, this same system works! You’ll be amazed at how many mistakes it will help you prevent.) Yes, Accounting is a very simple process. All you have to do is keep the system running. For example, every order I process, I complete it completely before moving on to the next order. Example: 1. Mail is received and opened. As each piece is opened, it is placed in individual stacks. Prepaid orders are placed in one stack, information and daily correspondence in another, and so on. 2. Each order that has been paid in advance is processed first, and each one is individually processed to completion. (That means it’s in an envelope, a typed label, and the entire order is ready to be mailed to the post office.) 3. During the process, the “date”, “check or payment amount” and “ordered product” are recorded on the outside of the envelope, making sure that the customer’s full name, address and telephone number (if available) are also in the envelope. 4. Just before the office closes for the night, the envelopes are entered into our computer database (you can substitute a computer for hanging files at first). We record all the information that was written on the envelopes during the order process. (Don’t think you’ll remember “what” the command was. That thought will open you up to human error.) If you run a business on the Internet, you will use the computer and email a lot. You need to do the following: 1. Create a different folder on your computer, name it with different resources: marketing, search engine tools, articles and tips, e-books, e-newsletter lists, image files…

2. Create folders in your email account, you can save useful emails for different purposes: training, sales, purchase receipt, new customers, prospects… As your business grows, your understanding and skills will grow as well. At that point, it can become a more sophisticated means of carrying books. Meanwhile, keep good records. They are the lifeblood of any business and can eventually make or break you. You’ll thank yourself in the long run.