Class 10 Account (Office Management and Accounting)

Filing is the process of safely preserving, in a scientific manner, the letters and documents created or received from the daily transactions of an organization, so that they can be easily retrieved for future reference. The three main aspects that must be included in Filing are:

• Collection: Gathering all necessary and important documents.
• Preservation: Protecting the collected documents from risks such as tearing, loss, or being eaten by insects.
• Availability: Ensuring that any required document can be obtained immediately whenever the need arises.

The four important functions performed by Filing are as follows:

• Protection of Records: It protects important legal and administrative documents from potential risks such as fire, water, and theft.
• Classification and Management: It organizes documents by separating them according to subject, date, or name.
• Presentation of Evidence: It serves as a source of factual evidence in situations of mutual disputes or court cases.
• Support for Policy Making: It helps management formulate new plans and policies by making past records easily available.

Filing is regarded as the memory of any office. Its necessities are as follows:

• To preserve important letters and agreements safely.
• To obtain information about past transactions when a decision needs to be made in the future.
• To present official proof when any dispute arises between the organization and an external party.
• To make the office’s work faster and more efficient (by saving the time spent searching for documents).
• To prepare the organization’s future strategy based on past work progress.

Pigeon Hole Filing: This is a traditional method in which small compartments (holes) are made in a wooden box or cabinet. Each compartment has a letter of the alphabet written on it (A–Z or क–ज्ञ), and letters whose names begin with that letter are placed in the corresponding compartment. This method is more commonly used in post offices.

Bundle Filing: This is an old Nepali government filing method. In this method, documents of a similar nature are wrapped in a piece of cloth to form a bundle. A tag mentioning the subject, office, or date is hung on the outside of the bundle. This is an inexpensive method, but it is cumbersome when it comes to retrieving documents.

The modern method of storing documents in the form of ‘soft copies’ using computers, the internet, hard drives, scanners, and other digital technologies is called Electronic Filing. Documents are scanned and saved on a computer in folders organized by subject. This method does not occupy any physical space, documents remain safe for a long time, and a high level of confidentiality can be maintained by setting passwords.

1. Alphabetical Filing:

• Advantages: (1) It is easy to understand and use. (2) A separate index is not required for it.
• Disadvantages: (1) There is a possibility of confusion when many individuals or organizations have names starting with the same letter. (2) It becomes complex for large organizations that have a large volume of documents.

2. Numerical Filing:

• Advantages: (1) Since the file has a number instead of a name, it is highly confidential. (2) No matter how many files there are, new ones can be added easily (it is flexible).
• Disadvantages: (1) Since a mandatory index is required to find a file in this method, it is expensive. (2) This method is not considered suitable for small organizations.

If an organization’s transactions are spread across different locations, the classification done on the basis of those geographical areas is Geographical Filing. It can be done on the following bases:

• On the basis of country or state: For example, a multinational company can maintain a separate file for Nepal and a separate file for India.
• On the basis of province or district: For example, files for customers in Bagmati Province can be kept in one drawer, and files for customers in Gandaki Province in another.
• On the basis of local government or city: For example, maintaining separate filing for the Kathmandu branch and the Pokhara branch.

The method in which documents are arranged in the order of the date they were received or prepared (year, month, day, and time) is called Chronological Filing. The oldest document is placed at the bottom and the most recent document is placed at the top.

Suitable Records: This method is most suitable for filing receipts, vouchers, bank cheques, attendance registers, and daily correspondence, where large volumes of transactions occur on a daily basis.

The main objectives of preparing an Index are as follows:

• To immediately locate which drawer and position the filed documents are in.
• To save the time and effort spent searching for documents.
• To provide a cross-reference facility for searching a single letter by more than one name.
• To increase the work efficiency of employees and speed up the office’s performance.
• To organize the information system and assist management in making quick decisions.

An excellent filing system should have the following qualities:

• Simplicity: The filing method should not be complicated. Even an ordinary employee should be able to easily understand it and place or retrieve files without difficulty.
• Flexibility: As the size of the office and the volume of transactions grow, the system should allow for the easy addition or removal of files.
• Economy: Setting up the filing system should not require expensive equipment and a large workforce.
• Security: The system must have the capacity to fully protect documents from dust, insects, water, and fire.
• Secrecy: Provisions must be in place to prevent unauthorized individuals from easily viewing or stealing important organizational documents.
• Compactness: It must be organized scientifically so as not to occupy too many rooms or too much space in the office.
• Accessibility: As soon as the need arises, the required file should be locatable immediately without any delay.

Filing methods that were used before the development of modern technology, and which are still seen in some small offices, are called traditional filing methods. The main methods are as follows:

• Wire Filing: This is the cheapest and oldest method. A thick wire or iron spike is placed on a wall or table, and documents are threaded onto it. There is a risk of documents tearing and getting dusty.
• Pigeon Hole Filing: Small compartments resembling pigeon holes are made in a wooden frame. Each compartment is named क, ख, ग or A, B, C, and letters beginning with that name are inserted into the relevant compartment. This is more commonly used in post offices.
• Bundle Filing: Documents are collected on the basis of date or subject and tied in a piece of cloth to form a bundle. This is a very prevalent old method in Nepal’s government offices.
• Misil (Dossier) Filing: All documents related to a single subject or case from beginning to end are placed in a thick file and tied with string. This method is used most commonly in courts and land revenue offices.

The method of arranging files or documents in sequential order in open shelves or racks (without doors) is called Open Shelf / Rack Filing. Since the files can be seen from the outside, they are very easy to locate, and this method also takes up less space. It has two main types:

• Horizontal Rack Filing: In this method, files are laid flat (horizontally) on the shelves of the rack, stacked one on top of the other. It is somewhat difficult to remove files from the bottom in this arrangement.
• Vertical Rack Filing: In this method, files are placed upright inside the rack, just like books on a shelf. Supports are provided at intervals to hold the files in place. This is a more scientific method than horizontal filing and makes it easier to retrieve files.

The method of classifying the transactions of an office under different subjects (such as Purchases, Sales, Accounts, Advertising) and placing files in separate drawers or slots according to those subjects is called Subject Filing.

Advantages:

• All information and documents related to a single subject can be obtained from one file.
• It is extremely useful for large organizations that have a division of labour and many departments.
• Since new files for additional subjects can be easily added as needed, it is flexible.

Disadvantages:

• Sometimes a single letter is related to multiple subjects, which creates confusion about which file to place it in.
• It requires skilled employees who have a thorough understanding of the subject matter.
• Since it is difficult to locate a file without an index, it is expensive.

Indexing is a symbolic list or guide that helps to immediately locate in which drawer and at which position filed documents or files are stored. It saves both time and effort. The main types of Index are as follows:

• Book Index: This takes the form of a ledger or notebook with alphabetical letters (क, ख, ग or A, B, C) written on its edge tabs. The relevant alphabetical page is turned to find the address or location of a person or file.
• Card Index: In this system, the details of a file are written on small cards and placed in a card cabinet in alphabetical order. This is more commonly used in libraries and hospitals.
• Visible Index: In this system, the edges of many cards are arranged so that they are all visible at once as soon as a drawer is opened. This means the cards do not need to be removed individually to view the information.
• Rotary Index: In this method, cards are attached to a rotating machine or wheel. By spinning the wheel, the required card or information can be viewed instantly. This is most commonly used in large commercial organizations.

Meaning of Alphabetical Filing: The method of storing documents according to the name of a person, organization, or subject — using the alphabetical order of any language, whether Nepali (क, ख, ग) or English (A, B, C) — as its basis is called Alphabetical Filing. Names beginning with ‘A’ are placed first, and names beginning with ‘Z’ are placed last.

Advantages:

• Simplicity: This method is extremely easy to use and understand. It does not require specially trained staff.
• Economical: Since a separate index does not need to be created for this method, both time and money are saved.
• Flexibility: Since new files can be added and old ones removed without any hassle as needed, this method is very flexible.

Disadvantages:

• Unsuitable for Large Organizations: In large organizations with thousands of documents, many names may begin with the same letter, making it difficult to maintain the correct order.
• Confusion with the Same Name: If there are many customers with the name ‘Ram Bahadur’, for example, it becomes difficult to identify whose file is which, and there is a risk of confusion.
• Lack of Confidentiality: Since everyone can easily understand the alphabet, anyone can easily find and view a file, which creates a risk of information leakage.

Meaning of Numerical Filing: The system of assigning a specific number or code (such as 1, 2, 3) to documents rather than using the name of a person or organization, and arranging them in sequential order in drawers, is called Numerical Filing. In this system, a number is used instead of the actual name of a client or file, and a separate index card must be consulted in order to locate that file.

Advantages:

• Confidentiality: Since only a number is written on the outside of the file, an external person who does not have access to the index cannot know whose documents are inside.
• Flexibility: No matter how many additional files need to be added, they can be easily added at the back by assigning a new number, making it flexible.
• Scientific and Appropriate: It is considered a very organized and scientific method for large organizations where a high volume of documents is handled.

Disadvantages:

• Expensive: Since using this method requires a mandatory index and skilled staff, it is expensive.
• Unsuitable for Small Organizations: For small offices with few documents, making all these arrangements is cumbersome and costly.
• Difficult to Understand: Since files must be located based on numbers, ordinary people or new employees find this system difficult to understand and operate.

The method of storing documents by punching holes through them with a punching machine and then placing them flat (horizontally), stacked one on top of another inside a thick paper file, is called Flat Filing.

Advantages:

• This method is very inexpensive to establish and operate.
• It is extremely simple to use and takes up little space.

Disadvantages:

• It is very cumbersome to remove and replace a document from the bottom or middle of the stack.
• There is a risk of important documents tearing when they are punched and pulled out. Its capacity is also limited.