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Round one: If you win this round, you're basically home free. So, in a sense, the Double Jeopardy round comes first. I know you haven't had a chance to warm up yet, but once you get started, depend on the momentum because you're going to need it. Before you answer any questions, you must develop a filing system.

For those of us just getting our small business started, this task is difficult enough. However, for those of us who have been in the business for awhile, praying desperately to the tax gods not to audit our tax records this year, developing a filing system will require a little more will power. Unlike Alex Trebek though, I can promise you huge rewards if you just survive every round!

Where do you begin? Well, you can start off by determining who of your customers is tax exempt and who is not. Two of your filing categories should be for tax exempt customers. One of these categories should be for out-of-state customers. Out of state customers who do business out of state are exempt from your state sales tax. However, if an out-of-state customer's business is out of state, but they're doing business in state, you have a right to collect sales tax from them for their in-state business.

The other category of tax exempt business comes in the form of middlemen or a customer who is going to buy your product, mark up the price, and then resell the product. This customer does not need to be charged sales tax.

Round two: Once you've laid the groundwork, you can use a computer to help you maintain your filing system. Excel spreadsheet is a versatile computer program you can use to keep track of the tax-exempt certificates, their expiration dates, and the status as to whether or not the certificate has been signed by you and the customer. Many additional database programs are available on the market as well. Once you know what you need, you can go to a computer retailer, specify your requirements, and let the expert narrow down your choices for you.

Round three: How and when do you get your customer to fill out the paperwork? The "how" of getting the paperwork should be relatively pain free because your customer will need the paperwork for his or her own records as well. "When" you get your certificate of resale signed depends on you. Two schools of thought exist. One says, "Get it done before the deal," while the other touts, "Wait until after you seal the deal!"

Advantages exist for both alternatives. If you decide to get the paper work filled out before hand, you have the ability to anticipate problems. Say a customer acts suspiciously or even cancels his order when you ask him or her to fill out the certificate. If so, it's probably a good thing that you're not doing business for this particular customer. Another advantage to getting the certificate signed before hand is that you'll be able to add the customer's information into your filing system and, hopefully, your electronic filing system as soon as you can.

Now, let's say that you wait until after a deal is signed before you talk about filling out paperwork. This has the advantage of taking some of the pressure off of you and the customer while negotiating prices and work. The negotiation process is difficult enough without adding in another time consuming aspect.

The disadvantage to waiting until after a negotiated purchase to start talking about filling out paperwork is that you cannot anticipate possible problems before you are locked into a contract. In addition, once your customer is given the freedom to fill out the certificate on his or her time budget, you will be on his or her time clock, not your own.

Whew! You made it through three rounds! Now, you can conduct your business without the constant fear that you're up next for an audit. In fact, you may welcome an audit because your filing system is an amazing and possibly newsworthy item in and of itself.

You've won Jeopardy! In Round One, you created a filing system; in Round Two, you developed a computer system to keep up with all of your tax exempt customers; and in Round three, you got your certificates signed by your customers.

So maybe Alex Trebek won't deliver that new Range Rover to you after the show, but isn't creating a filing system its own reward?