Bookkeeping - Filing for Multiple Entities
It's fairly common in the current age for a business to hold multiple companies, ranging from Publicly shared Corporations to Sole Proprietor LLCs. The range of industries is vast; Real Estate, Hospitality, Automotive, and much more.
While the larger corporations will likely have a set standard of procedures, smaller companies are less likely to have adopted procedures that are adhered to. This does allow for some flexibility that is sometimes necessary, but can ultimately lead to confusion and mixing of entity finances.
For very small companies, (think a handful of employees or less), it is important to get the files in order. This allows for ease of information retrieval for monthly, quarterly, and annual reporting, as well as daily needs that only one person may handle. Setting up your files and organizational structures will be a very beneficial investment in your long term outlook.
It may be particularly helpful to color code files from different entities. For example, Company X has folders in blue, while Company Y has folders in Yellow. They have the same labeling and organizational structure (i.e. Avery labels in the same font, files loaded alphabetically according to function). This allows everyone in the company to be able to determine which company files are being used at a glance.
A step further is to color code invoices, payables, tickets, checks, and any other entity specific documentation that is utilized. The benefit of this extra step is that there is no confusion as the document travels its course throughout the company from origination, approval, action, and finally - filing. Nobody knows better than an employee who has found a document filed in the wrong entity how easily that can happen.
If you use a current action folder system, including inboxes, hanging folders, accordion files, or even online apps like Asana, this system will be useful as well - Especially if you are working collaboratively.
Do you work with a company that owns multiple entities and have a filing suggestion? We love comments! Leave it below and share!