N4 Introductory Financial Accounting | Student Book 3.3.2 External documents


External documents are received from outside the organisation, for example invoices received, when buying goods. The original copy of the document is given to the business.


3.3.3 Filing/archiving of documents


To archive means to store all the source documents of a business in a safe place. The source documents must be stored in such a way that they are available and easy to find. Once the bookkeeper has recorded the details of source documents in the relevant journals, these documents must be archived safely in a place set aside for this.


Ways of filing/archiving source documents • Small companies use cupboards or storerooms to archive paper documents.


• Big companies store source documents on a computer with a backup system , which could be disks, removable hard drives or flash memory drives.


Company policy of filing/archiving A policy is a set of rules and procedures that must be followed in any business. Companies will have a policy about where and how their source documents and other important documents will be archived.


Missing or incorrectly archived non-routine source documents If source documents are incorrectly archived then no one will be able to check the information. For example , if there is an error in the Cash Receipts Journal and it does not cross cast, the bookkeeper cannot check if the source documents are missing. Missing documents could have serious implications of fraud in a business. SARS might want to inspect the records of the business to see if they paid the right amount of VAT. If the business has not kept its records safely, SARS could make the business pay a fine.


3.3.4 Types of filing


Filing systems have changed over the years from filing paperwork in boxes to software programs that store files electronically. It’s important to consider the characteristics of each to select the most appropriate one. • Horizontal filing


The horizontal filing system is where the documents are chronologically placed in folders one upon another in a horizontal or flat position in drawers. The latest documents are placed on top and the oldest at the bottom in the folder. Horizontal filing is also known as flat filing.


• Vertical filing Vertical filing indicates the vertical position of the files. The files are stored in a standing position. Usually, drawers or cabinets are used so that any folder may be taken out or replaced without disturbing the other folder. A separate folder is maintained for each customer, supplier or expense. The files hang vertically with the identification tab on the top edge. Folders are kept vertically in a steel or wooden


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