How to Create a Document Management System for Your Business

Whether you’re just starting a new business or you’re a seasoned entrepreneur, you’re probably creating or accessing a large number of documents every single day. No matter what type of business you have, implementing a well thought out document management system is an essential aspect of business organization that ensures your day to day operations run smoothly.

What is document management, exactly?

Broadly speaking, document management refers to a business’s system for organizing, filing, accessing, naming and even creating documents. In our digital world, a document management system for your business will likely be focused on the handling of digital documents. Still, it’s important to have a system in place for managing paper documents too. Even online businesses have to handle some combination of digital and paper, so unless you have an efficient system in place to digitize all paper documents, the ideal document management system for your company will address both types of business documents.

Why is a document management system so important?

  • It’s a huge time saver.
    Once you realize how much time most people waste just searching for and accessing documents, the importance of an excellent document management system becomes clear. According to a 2012 McKinsey study, workers spend nearly 20% of their time searching for and gathering information. If that time were freed up, think of how much more you could get done with a whole extra workday per week! If you have employees, the productivity boost will be even greater. 
  • It ensures you don’t lose important work.
    Saving time is just one reason why document management is an essential business practice. With business documents scattered between your email inbox, Dropbox, Google drive, computer drive, and business apps, searching for that one important attachment can be frustrating, and there’s no guarantee you’ll find it. Well thought out document management ensures that you can actually access files when you need them, instead of losing important information or having to duplicate work. 
  • It makes collaboration easier.
    If you have employees, chances are you’re collaborating with them on a daily basis. Even if you’re a sole proprietor, you might have to collaborate with contractors regularly. If multiple people have to work on a document or access it, an excellent document management system makes collaboration a breeze. 
  • It protects your business documents
    A secure document management system prevents loss or theft of sensitive business documents, such as accounting data or employee information. 

How to create your own document management system

You don’t necessarily have to purchase document management software in order to implement an effective, organized and easy to use document management system for your business. It’s possible to create a system yourself for free. The most important thing when it comes to document management is having clear, well-defined guidelines, and staying consistent in the application of those guidelines when creating and storing business documents.

When it comes to creating your own document management system, start by asking yourself a few key questions:

1. How can I be consistent when creating new documents?

Consider creating a template for the different types of business documents you create regularly. For instance, you might want to create an invoice template, email marketing newsletter template, and new contract template that you can use again and again. You should also consider how you will name your documents, and create rules for how new documents should be named before filing. That way, when it comes to searching for something you filed a long time ago, you can refer to your naming conventions and search for it easily.

2. Where will I store my documents?

Will you have a server of your own, or use cloud storage? Have a clearly defined destination for your document management system and stick with it. For paper business documents, you’ll need a physical destination, such as a filing cabinet with its own guidelines.

For each type of document, you regularly create, receive, or handle; include a line in your document filing guide with instructions for exactly how that document should be named and where it should be filed. This guide can cover both physical and electronic business documents. 

For example, if you receive an invoice from a vendor, your guide will indicate which folder on your drive it should go in if it is a digital invoice, and which folder in your filing cabinet should be used if it is a paper invoice.

3. How will I be able to locate old documents?

Your document filing guide will help you easily find old documents. If you’re looking for an old vendor invoice, just refer to your filing guide to see where they are filed. If you’ve been consistent with your naming conventions and filed everything according to your guide, you should have no problem at all finding it! 

4. How will I archive documents?

No matter how organized you are and how effective your document management system is, some of your digital and physical folders are bound to fill up with dated documents that you never open. That’s why your system should include a plan for how to archive old documents. This can be a part of your end of year checklist.

For folders that need to be archived, you can change the name to include the previous year in the title, and create a brand new folder for the year ahead. You can do this for both physical and digital folders. It will help keep all those folders neat, organized and uncluttered with years worth of documents. 

5. How will I back up my documents?

For your digital data, it’s essential that you come up with a way to back up your files regularly if you use a cloud service, research back up options for the particular provider you choose. If you decide to host your document management system on your own server or computer, consider backing up regularly to an external hard drive. Ideally, you should store that harddrive somewhere offsite for extra security.

Can I purchase document management software to make the job easier?

Depending on the needs of your business, you might decide that purchasing document management software is the best option for your document storage needs. While there are lots of options to choose from, you can use the list of questions above to help you make sure that you select a program with all the right features.

The other thing to keep in mind is your budget: document management software programs are often subscription-based, so you’ll be paying a monthly fee to maintain the service. However, given how important document management is for any successful business, you might decide it’s worth the regular expense.

How to keep your business documents secure

Whether you decide to create your own document management system or purchase software instead, a final key consideration is document security. Regularly backing up documents is a good security practice, but with sensitive files, you might want to restrict access as well.

If you have employees or contractors accessing your business documents, you might want to make certain folders available only to authorized users. Password protecting sensitive files is another good practice.

Your physical office space, even if it is in your home, should also be secure from theft. Keeping laptops and hard drives under lock and key might seem like being over-concerned, but it’s better to be safe than sorry when it comes to protecting sensitive documents and proprietary information. 

As with any good system, you get out what you put in. By spending some time on creating a thoughtful and detailed document management system now, and following the guidelines set out in your system, you’ll save yourself valuable time and energy for other, more important aspects of your business.


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