Resolve to keep your small business records organized this year

With holiday festivities now in the rearview mirror, it's time to work on making sure those New Year's resolutions become a reality. For many small business owners sick of working in messy surroundings, the new calendar year provides an opportunity to rifle through piles of papers, stacks of folders and other assorted detritus, getting rid of what they don't need and organizing the rest.

This approach can be applied to both physical and virtual desktops. As any entrepreneur who stores business data on a computer knows, electronic documents can quickly become just as disorganized as their paper equivalents, and mislabeling a virtual document can be equally as frustrating as misfiling a hard copy.

"As you pick up each piece of paper, make a decision: Is this something I really need?" advises Rhonda Abrams, author of books for entrepreneurs, writing for USA Today.

Abrams adheres to the basic rule of "When in doubt, toss it out." However, it's extremely important to make sure certain things aren't allowed to get lost in the shuffle. These include financial and personnel records, as well as contracts and other legal documentation.

It can be tempting to want to throw out receipts for taxi journeys, parking lot fees, restaurant bills from lunch meetings with clients or expenditures associated with employee holiday parties, but each of those scraps of paper are actually extremely important. According to Abrams, supporting documents for business expenses should be kept for at least five years - and it's best to hold onto some, such as tax returns and investment statements, indefinitely.