Document management is an important, yet time-consuming, process — especially if you’re not using an electronic system to help you. A computerized filing system can assist with creating, storing, managing and sharing documents and files across your organization. These systems also protect your documents from potential breaches and other security risks.
Here’s everything you should know about computerized filing systems and how to create one for your business.
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What is a computerized filing system?
A computerized or electronic filing system organizes and stores your business’s files on a hard drive or network space. This digital system can be software- or internet-based, or a simple folder/file system on a computer.
Why are computerized filing systems used?
The primary reason people use a computerized filing system is that it’s an easy way to safely store and organize files. This type of system can index your files for you. It categorizes and registers every document entered into the system based on specific properties that you can customize, such as file size or function.
Computerized systems also offer greater options for securing your files and sharing them, making collaboration on shared documents easier for team members. They also make it possible to easily exchange documents with clients — document management statistics even indicate that using e-signatures on digital files can improve close rates. Learn more about the benefits of computerized filing systems below.
Check out our roundup of the best document management software on the market to decide which specific system is right for your business.
How do you implement a computerized filing system?
Creating your own computerized filing system takes time, but that time and effort is worthwhile. The result is a well-thought-out and organized file management system with multiple advantages for your business’s operations.
Once you’ve decided on the platform for your computerized filing system (e.g., document management software, desktop folders and so on), here are six steps to implementing the system in your business.
1. Decide who will have ownership of your filing system.
If you are not personally overseeing the filing process, assign an administrative staff member to be responsible. Make sure your whole team is aware of what changes are being implemented and who is in charge of the process. This lets employees know whom they should go to with questions and who is the point person for keeping track of important documents.
2. Get organized.
Take inventory of all the documents your company has, how big they are, what their function is, how long they need to be stored, and so on. Next, loosely organize them according to those characteristics. This is the kick-off of your actual filing process, so think carefully about how you group your documents.
Keep your main goal in mind: to make it as easy as possible for someone in your organization to find a document quickly. Your digital folders should have a clear sense of order and should not be cluttered or hinder your company’s workflow. Be consistent in your labeling and separating.
3. Use subfolders.
You don’t need a main folder for every small topic. For example, you can make one folder for “Medical Records” and create subfolders within that category by month or year to keep your system orderly and uncluttered.
4. Decide on a naming convention and stick to it.
Naming your files is a vital part of the filing organization process. Proper and consistent naming makes it simple for anyone in your company to quickly find a document.
Make sure the file name makes sense and includes the most important information regarding what the document is or says. See tips for naming conventions below.
5. Integrate paper and electronic documents.
If you have essential paper-based documents that must be retained permanently, create a dedicated place within your filing system for those documents. Consider making electronic copies of the paper originals, or if you must keep the physical paper documents, store them in a secure location in your office in accordance with the structure of the digital system.
6. Inform your team how the filing system works.
Once your initial filing is complete, make sure your entire organization understands how the system works and how documents must be named, filed and stored going forward. Create a resource document that outlines all of your filing guidelines. Keep it in your files, and include training on your filing process as part of your onboarding process with new hires.
What are the differences between traditional and computerized filing systems?
Traditional filing systems are generally paper-based and manually organized, whereas computerized systems are digital, with documents organized and stored via a computer, as the name suggests.
Traditional filing systems tend to take up a lot of physical space — all of those papers require boxes or filing cabinets to store them — and these systems are susceptible to physical damage from fading, fire, flooding and other issues. Transitioning to a paperless office is a more secure way to conduct business.
Furthermore, computerized or electronic filing systems are generally more budget-friendly. They free up physical space and offer many benefits that help you organize your documents and share them across your company with ease. Switching from a traditional to a computerized filing system can greatly increase your system’s functionality by automating many aspects of the process, like indexing and tracking.
Computerized filing systems are perfect for businesses that want to store documents digitally, as they offer an affordable, cloud-based solution for document management.
What are the benefits of a computerized filing system?
Here are seven ways implementing a computerized filing system can help your business manage documents more efficiently.
- Automatic indexing: You can configure automatic filing systems to register, categorize and organize files based on specific criteria that you customize, such as file function or size. This functionality makes it a breeze to store documents in an orderly fashion and retrieve them just as quickly. Our review of M-Files, a document management software provider, dives into how helpful such workflow automation features are.
- Security: A computerized filing system provides security safeguards such as managed access control, audit trails, automatic backups and password protection. If a disaster strikes, like a fire or flood, your files are stored safely in the cloud, away from physical harm.
- Regulatory compliance support: If you operate in a regulated industry, such as healthcare, electronic filing offers regulatory compliance support for HIPAA, Sarbanes-Oxley, Good Manufacturing Practices by the FDA or ISO 9000/9001. This capability provides your business with invaluable protection and peace of mind as you process critical or sensitive documents.
- Scalability: A major benefit of computerized filing versus traditional filing is the ability to scale, or grow, the system alongside your business. When purchasing document management software, for example, you can start with a small amount of digital storage space and then progress to higher service tiers as needed, adding more space and tools to your system as your document collection expands. [Read related article: Advice for Choosing a Small Business Document Management System]
- Collaboration: An electronic filing system makes sharing and collaborating on documents simple. Tools like live editing, file sharing, plugin integrations and access restriction make teamwork much easier. These systems are also helpful for obtaining e-signatures from clients.
- Integrations: If your business uses one of the best CRMs or an ERP database, filing software that integrates with those programs will make your everyday business operations much easier. By connecting your platforms, you can increase workflow efficiencies. Many document management systems also integrate with email programs like Microsoft Outlook. [Learn about Microsoft’s document management solutions.]
- Quick document retrieval: Searching for the right document when you have an entire business’s worth to go through can be a nightmare. It can even cost you money. But with the proper indexing procedures in place via your computerized system, finding a document takes mere seconds, and employees can remotely access the documents they need from any location.
>>Read next: Why Small Businesses Need to Digitize Documents
How should you name files on your computerized filing system?
Naming your files effectively is one of the most critical aspects of an efficient computerized filing system. Without a consistent file-naming convention in place, finding documents can be confusing, difficult and frustrating. If you start with good habits when first implementing your system, you’ll set your business up for long-term success.
To begin, understand that there are two types of files you’ll be storing — the ones you create and the ones you collect. Create a system that differentiates these two file types in a way that makes sense, whether that’s marking it in the file name or dictating where the file is stored.
Next, decide on a naming convention. The best styles usually include dates and version numbers while avoiding special characters. An example could be “Employee Handbook 2023 Version 1” or “Employee Handbook February 10 2023.” You should aim to be descriptive and specific so files are easy to find according to how old they are and their subject matter.
Above all else, be consistent with file naming throughout your organization. While the conventions that work best vary from business to business, it would be challenging if different departments used different naming conventions. Try to use one style across your entire business so everyone and everything is in sync.
Sean Peek contributed to this article.