I think I cannot stress the importance of documents in accounting enough.

When it comes to documents in accounting though I don’t just mean source documents like invoices or cheques. What I also mean are contracts, minutes of meetings etc. It’s also your internal accounting rules I’m talking about.

Accounting is not just entries into your accounting software or Excel or whichever form you’re keeping your financial records, but also lots of documents. The form of them is mostly optional – either on paper or electronically, but depending on your local legislation, please ensure you have the appropriate form. I know that there are countries where keeping digital source documents and other documents is absolutely acceptable, but they have to be physically producible (i.e. printed out) and something that also has to be there in such a case is digital signatures. If you’re not able to sign documents digitally or it’s not legit you’re still obliged to have lots of documents on paper. However, in case digital signatures are totally okay by law in your country and you prefer having your documents as much as possible stored digitally then go for it! I’d say that keeping digital documents all organized and safe is a lot easier than doing so with physical ones. Obviously you’ve got to keep back-ups, but that’s easy nowadays where you can outsource almost everything.

With documents you have to ensure that they are also there after a certain time. This “time” is something that’s determined by law mostly. You must keep all source documents for x amount of years from the time they were used in accounting or something similar is what’s usually said in the regulation. Why? The reason being is mostly for government officials. When they’re investigating something, they may want to go back in time and hence the obligation to keep those documents. It’s also for your own good or for investors or auditors and whatnot. Everyone who may be interested in going back in time in your accounting to see what was done and on which ground, i.e. with which documents, would be interested in those documents as well. Hence keeping them safe, organized and in such form that they are readable after this x amount of years is important.