Financial Workflow

David Allen's workflow was my first introduction to the concept of a workflow as a way to organize my actions. I encourage you to study it and try it out. The idea of a set process, an algorithm, for accomplishing certain things should have come naturally to me, a software developer. But it didn't, probably because it was too obvious, or because I subconsciously assigned that job to computers. Although my first introduction to principles of productivity was Stephen Covey's The Seven Habits of Highly Effective People, I've learned a lot and become more productive recently by reading and applying Getting Things Done, by David Allen. Getting Things Done focuses on the workflow linked above. I will probably comment on that more in the future, especially as I encounter successes or failures trying to follow it, and trying to integrate the concepts into the larger frameworks of 7 Habits. However, right now I'd like to share a workflow that I've developed for managing my finances.

In my financial workflow there are three collecting baskets - Receipts, Bills, and Statements. As we process our everyday information, everything financial goes into one of those baskets (or, if it doesn't fit there, into the general reference filing David Allen describes). Once a week, my wife and I go through the following process, which is based around receipts, bills, and statements.

First we work our way through the receipts: we confirm that they have cleared online, leaving them in the basket if they haven't. If they have they then move to a folder/basket titled Receipts to Reconcile. We have a current month and previous month receipts to reconcile folder for each financial account. We'll get back to that.

Assuming everything has gone well checking the receipts we then move on to Bills. If the bill is due in the next 10 days we pay it, if not we leave it till next week. This encourages us to go through our financial workflow on a weekly basis. We pay most bills online through a bill pay service, but paying them the old-fashioned way works just as well – just don’t forget to send them. Bills that are also statements (credit cards) are then placed in the statements folder. Other bills are marked as paid and placed in the Receipts basket to be dealt with once our payment has cleared.

Finally we deal with statements. First we check to make sure that the statement matches our online records. This may sound tedious, but really it just involves confirming start and end balances. If those match up then we're good. If not then we can take the problem to our financial institution. We’ve got all our receipts for the statement in the receipts to reconcile folder for that account, so our records can be used to resolve the problem.

If the start and end balances do match up, then we go through the receipts to reconcile folder to make sure we keep important receipts. We file bills in their corresponding general reference file, large item receipts in their own folders with warranties and other information, and shred what's left. We then file the statement.

Finally we discuss anything on our budget agendas: big-ticket purchases we want to make, budget reallocations, and other financial things that have come up that we need to discuss.

Although we've just started doing this its already working fairly well, and the time it takes is getting to be manageable. It's obviously a work in progress and anyone with slightly more complicated finances than us will quickly find many holes. I'd love to hear about them. I want to continue to develop this workflow until it represents a solid method for the day to day financial dealings that most families face.