Businesses incur many expenses throughout an accounting period. While businesses report these expenses as an accumulated figure in the Statement of Profit or Loss, they require a lot of documentation behind the scenes. Businesses pay their expenses through bills. Bills are similar to invoices for businesses. Businesses receive bills that ask a business for payment against services or products they have used. After some period, the business pays the bill for the amount due.

Organizing bills for a small business can have many benefits. For example, it can boost productivity within the business. Similarly, a well-organized bill system in a small business can make tracking different expenses and reconciling them with accounts payable easier. Especially in circumstances where the business has a paper-based bills organization and account payable system. It can, therefore, be the differentiating factor between satisfactory and non-satisfactory supplier relationships.

Similarly, keeping bills organized can have other benefits for a business as well. An important reason to keep bills organized is so that the business can easily identify bills that have a close due date. Therefore, it can help the business pay any bills on time. Similarly, some bills may come with early settlement discounts. The business can only identify these discounts through a good bills organization system. Besides, keeping bills organized can also be beneficial during tax or external audits of a business.

To organize bills small businesses must use different processes or techniques. Some of these are listed below.

Making a plan

One of the most important processes in an effective bill organization system is making a plan. Making a plan before getting started can help the business significantly in organizing its bills. The plan can define different aspects of the organization system such as the frequency, the employees involved, the defined places for different bills, etc. This plan can also act as a guideline for employees to follow when they are uncertain about their roles or duties.

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Making a plan at the beginning may seem like an unnecessary task or extra work. However, this plan can help the business and its employees work towards the same goal with defined ways to achieve the goal. For a paper-based organization system in particular, where everything isn’t automated, it is a better approach to make a plan first.

Keeping bills in defined places

For an effective bill organization system for small businesses, all bills within the business must have a defined place. For example, the business may allocate a portion of a cabinet for electricity bills. However, not only should these bills have defined places for the bills, but the business must also instruct its employees to keep the bills in those defined places. Usually, this kind of system is needed more in a paper-based bills system rather than an electronic one.

For an electronic system, small businesses can create digital folders to categorize different bills into months and years. For example, as soon as a business receives an electricity bill, it can copy it over to the related month folder. Businesses can also create different folders for bills that have been taken care of or paid. This way, it can be easier for businesses to track which bills need are unpaid. Automatic accounting systems can also take care of organizing bills without the need for manual work.

Sorting bills according to the due date

Small businesses will also find it useful to sort bills according to their due date. This can help the business determine which bills require immediate attention. Similarly, it can help the business avoid any fines or penalties related to late payment of these bills.

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Sorting bills in a paper-based system may be more tedious and prone to error as compared to an electronic system. This is because sorting bills in a paper-based system require an employee to manually check bills for their due date and sort them according to it. Similarly, an employee must also check the sorted bills to see which ones the business needs to pay next. In an electronic system, the sorting and checking processes are automated. Also, an electronic system can give reminders to the business about bills that are due soon.

Taking a more frequent approach

Another step that smaller businesses can take to organize their bills is to take a more frequent approach to the bill organization system of the business. This may require further work required from employees. However, taking a regular approach to organizing the bills of a business will ensure that it meets important deadlines. For example, small businesses can organize their bills two times a week instead of doing it at the end of each week.

In a paper-based system, businesses can organize bills in batches which will ensure that they can maximize their efficiency. With an electronic system, this process can be completed automatically without the need for manual intervention.


There are many expenses that businesses occur throughout an accounting period. It is important for businesses, especially small businesses, to organize the bills for these expenses. Organizing bills can have many benefits. Businesses must use different techniques or processes to organize bills. These include making a plan regarding the organization process before anything else. Once businesses make a plan, the process will further consist of keeping bills in defined places, sorting these bills according to due dates and taking a more frequent approach to organizing bills.

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