5 Ways A Paper Trail Can Help To Protect And Enhance Your Business
by Arina Smith Business 21 April 2021
A company paper trail consists of documents such as contracts with vendors, payments to suppliers, income from loans, grants, and customers, insurance certificates, and authorization to operate (such as health and safety certificates).
Keeping a paper trail is the only way a company can analyze its successes and solve past disputes. For more information on what we mean by this. Here are five ways below how a paper trail can protect and enhance your business.
Protect Data From Cybercrime
There’s an increasing trend among company owners to document and keep all their company intel, such as financial records, business plans, customer credentials, and so forth, stored on the cloud.
However, the online realm is susceptible to numerous risks that could be detrimental to the company’s success. Such as fraudulent activity and hackers stealing, selling, and deleting important data.
As such, it’s essential to keep a backup of documents in paper form. For example, in the event, a malicious cybercriminal accesses a company’s financial records and tampers with the numbers. A business owner can quickly rectify the issue by referring to the hard copy from the paper trail.
Keep A Paper Trail For Tax Purposes
Every entrepreneur must track business outgoings and income to determine the subsequent profit and tax they need to pay to the government.
Once company owners have used their receipts, bills, and income to calculate and submit their tax returns. It’s in their interests to keep a file of their business’s income and outgoings to submit as evidence if, for example, there’s a tax dispute from the IRS.
Keeping a paper trail of documents will cover company owners if they must provide hard evidence of their financial records to the government.
Solve Payment Disputes
Whether a vendor is certain a company owner missed making payment for their services a few months ago. Or a customer declares they were overcharged for a product last year.
A company paper trail provided it’s kept in an organized filing system will allow you or an employee to search for proof of purchase to solve and prevent issues such as these from escalating.
Avoid Future Financial Mistakes
Filing an accurate paper trail of the company’s plans, achievements, and financial successes along the way gives businesses a clear idea of how far they’ve come. But also what processes and methods did and didn’t work.
For instance, if a business previously invested in PPC on social media to gain click-throughs to their company in California. But the corresponding website and sales data reveal no increase in sales.
A business can move its marketing fund to an alternative agency or solution. To prevent the risk of pooling more money into marketing methods that have been shown previously to be ineffective.
Control Company Cash Flow
Money is a necessary component for any business to thrive. The management of that money will determine whether a business prospers or fails.
Keeping control of the company cash flow by way of a paper trail not only gives the owner peace of mind. It also ensures they have full control over the business.
After all, poorly managed, inefficient processes in business are a cause for disaster. Which allows mistakes to run wild, money to leak on forgotten subscriptions, and data to remain unprotected from the attacks of hackers.
As you can see from the points above, to enhance and protect the livelihood of your company, creating a paper-trail system to categorize and organize all documents is a must.