How Long Should I Keep These Records?
The length of time for which you must maintain your business records varies by type:
• Client contact information. As long as a client is active, all contact information should be readily available. Records for clients who are not active, but with whom you are on good terms, should be kept, too - these contacts are excellent sources for mailings, and provide additional value should you choose to sell your business down the road.
Working files should be kept for at least several years - long enough to be sure that the service or product provided has been paid for and its value not called in to question. What are working files? They are the notes, drafts, papers, and other items you accumulate as you work on a project. They are not the finished project itself, but the preliminary drafts, discussions, and note that lead to the final version.
If there are legal, ethical, or other considerations in your profession, you might need to keep your working files longer. (For instance, attorneys, accountants, and insurance agents might be required, either by laws or the ethical canons of their profession, to maintain records for a set period of time. If you are in these businesses, you should know these regulations quite well.) Personal preference comes in to play, too. I know some writers who still have working notes from stories published 20 years ago - and I know other writers who toss all papers as soon as a story is published and they are paid.
Keeping working files for at least three to five years, however, is not a bad idea and will help your work at home business.
• Financial records should be kept as long as you own your business. Because it is relatively easy to maintain a lot of records on your computer, you can keep the basic information there while archiving physical paper files to a storage facility after several years. If the electronic files get too cumbersome, move them off your computer and onto a CD-ROM or DVD. It seems odd to keep years and years of financial records handy, but as you run your business, you might want to have these files readily accessible. Even if you move the records to some type of electronic storage each year, keep the records handy. The information stored in them is valuable to you, as you watch for year-to-year trends, and compare each year with prior years.
Setting Up Your Home Based Business Office Space
You have your record-keeping functions in order; now you’re ready to set up your office space. But before you connect all that shiny, new equipment from the last article, make sure that these items are in order:
• Is your electrical system up to the task? Are the outlets where they need to be? Are the phone jacks near the actual phone base? Is the wiring “iffy”? Then have it inspected and upgraded before proceeding.
• Is your office space dry and free from water leaks? Leaks can damage costly equipment, so address the problem right now.
• Give your home office that extra coat of paint if needed. Buy a new rug, hang your favorite painting, and make it comfortable. You will be spending a lot of time here. Make it comfortable!
• Your home office might have been the family junk room before you took it over - end that pattern! Furniture, wall hangings, or knickknacks that just don’t fit in other parts of the home are not allowed in your office.
Get your physical home business office as ready as you possibly can. You will want to start operating out of this office right now (if you haven’t been already).