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	Organize Your Bookkeeping

	by Patricia Coleman-Sherwood

Finances!

What to keep and what to toss ranks as one of the most fundamental, yet confusing, questions in the organization of bookkeeping tasks. And, as many people begin to help aging parents deal with the volumes of statements and explanations from insurance, investments and the like, the process can seem overwhelming to everyone involved.

The first step toward demystifying the process is to create a system to manage the reams of paperwork. Denise Sintetos and her husband, Chris, are highly qualified for the job, but according to Denise, bookkeeping for aging relatives can still be a daunting task.

"Having been through it several times, I can only say I don't know how an elderly person can make sense of all the paper they have to keep and process," said the professional organizer who operates DeClutter, DeStress in Bethesda, MD,

Given their skills and their experience with family members, Denise and Chris, a CPA who specializes in tax and financial planning, are far more prepared than the average adult child to take on the financial paperwork for aging family members, but according to Denise, it isn't something that comes easy to most people, regardless of age.

"It's the kind of thing that most of us put off," she said. "The key is putting some time into it."

There is a wealth of information available, from Websites to the one-on-one services of a professional organizer, for anyone who is ready to tackle the job. Denise offers some tips about where to start.

Mail Sorting

The best way to begin organizing paperwork is to tackle it when it comes through the door. Her method uses the acronym, RAFT, for read, action, file and toss, as a good, easy-to-remember sorting system.

"For mail sorting, it's best to establish a set place to do the job," she said. "So, as you sort the mail, have a basket for items you want to read. Add a folder or basket for anything that needs action, such as bills."

"For bill payment, there should be a set place and schedule," she said. "A simple schedule would be to sort mail every day and pay bills every two weeks..

Add two more files or baskets – one for anything that must be filed and one for items to toss, until they can be shredded.

"(File) the paperwork once a month and purge files once a year," Denise advised.

Tools she suggested to be kept within easy reach included a shredder, a trash can and a recycle bin.

Denise said the RAFT idea isn’t hers, but she liked it for its simplicity when she came across it in something she was reading.

“I wish I could remember where it came from,” she said. “It’s short and sweet.”

Basic Filing

"How to Organize Your Financial Records – For Dummies" suggests a list of folders as a starting point for creating a filing system. The list outlines the basics. According to Denise, modifications and additions will help make it more individually useful.

"These are broad categories," she said. "You have to tailor it to your needs."

The list includes, but is not limited to, categories such as home, cars, bank accounts, credit cards, health care, insurance, utilities, home repairs, investments, utilities and tax records.

Along with the basics, Denise offered some suggestions, and an explanation as to why some records with little apparent value may prove their worth in the long run.

"I would add to the Home Repairs section a place for permanent improvements to your house," she mentioned as an example. "This is important for tax records and will be needed when your house is sold."

She said that the cost of permanent improvements can help offset the amount of capital gains tax the homeowner may have to pay when the house is sold.

Files to Keep

According to "Learn How to Organize Financial Records" home repair files are among those that should be kept indefinitely.

"There are a few records out there that should have a permanent place in your files, and may also be worthy of being copied and stored in a secure, secondary location, such as a safe-deposit box, a locked fireproof box, or kept off-site by a trusted guardian," the article said.

The site also listed:

An inventory of personal valuables
Diplomas and/or college transcripts
Medical records
Employment records
Records involving disputes
Birth certificates
Marriage license
Social Security numbers
Passport documentation

Helpful To Family Members

Denise and Chris' experience helping older family members with their financial organization led her to stress the importance of adopting a system that makes it possible for family members to step in and conduct day-to-day business, if necessary.

The Website, Today's Seniors, lists forms that seniors can download and use to record assets and locations of important information. The forms can provide an efficient method for conveying a wealth of information, including a number of items Denise cites as crucial to managing someone's finances.

"It is important for financial documents, including the will, trusts, life insurance policies, bank and investment accounts to be accessible," she said. "If you have these items, let someone you trust know where they are. If assets, such as bank accounts, are password protected, your trusted person will also need this information to handle your affairs."

What and When to Toss

According to Denise, this aspect of financial organizing is a sticking point for a lot of people. Since trying to decide what to dispose of is often what leads to a backlog of paperwork, Denise recommends learning more about how to make those decisions.

The Home Made Simple Website presents basic organizing tips, gives some guidelines about how long to keep various documents, and a schedule of what can be deleted on a monthly or yearly schedule.

Professional organizers, such as Cheryl's Organizing Concepts and DeClutter, DeStress offer more detailed lists, and a wealth of information for fine-tuning filing systems. After identifying the paperwork that can be eliminated, the next step is to do it safely.

"My favorite appliance is the shredder," she said. "I will offer to bring it sometimes."

She added that there are relatively pain free solutions, even for people who have accumulated big backlogs of paperwork. According to Denise, Office Paper Systems, in the Gaithersburg, MD area, which is contracted to destroy paperwork from hospitals and government offices, will shred personal paperwork for free.

"They take it to a secure area," she said. "If you actually want to see it shredded, you pay a fee of $30 and they will take you into a viewing site to see the process on a remote camera."

Conclusion

A professional organizer can de-mystify the process, provide valuable guidance and reduce the trial-and-error investment of time most of us would rather use doing practically anything else.

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