Small Business Brief

Technology & Software

From Organization to Storage: How to Set Up a File Management System for Your Business

According to studies, an average employee spends 1.5 hours per day searching for something. The Small Business Administration estimates that people do not refer to 80 percent of the papers in their file management system.

Time spent looking for a document from a bunch of papers means wasted employee time and reduced productivity. Organizations also waste money by filing unnecessary material.

Modern businesses are so into migrating from paperwork to digital storage, but how many offices can operate without paper entirely?

A mix of digital documents and hard copies poses challenges in filing in many offices.

If you’re looking for an ideal file management system, you are in the right place. Keep reading to learn more!

How Should You Store Documents?

You have multiple options for storing documents, including a file cabinet, boxes, and long-term storage options like containers. Regardless of your storage option, you should consider factors like humidity, light, and temperature as they have a direct effect on paper.

Used storage containers can be great options for organizing your documents if you know how to use them. Be sure to view here to learn how to plan and set up your storage facility.

Getting Your Papers Organized

Filing gets out of hand gradually. You begin with putting all documents that come your way at the same place. And before you know it, you cannot locate a specified document without scanning through piles.

Here is a procedure for developing a workable file management system.

Create File Categories

Categorize your documents into broad classes. For instance, anything relating to accounts can go to the ‘Accounts’ category.

You can worry about separating invoices from pay slips later. It’s easier to deal with similar documents vs when everything is combined haphazardly. 

Subcategorize Items

Focus on each of the categories created in the first step and sort the papers into subcategories of related documents. For example, keep all the invoices in one cluster and the pay slips in another.

If you have a considerable number of suppliers, let each one of them have an individual file, for example. Do the same for the other categories ensuring that each file has specific documents and subcategories.

Color-Code the Folders

Assign every broad category some color of your choice. Each of the subcategories will go to an individual hanging folder under the respective broad category.

If you give red to ‘Accounts’, every subcategory folder for accounts will be red. Be careful not to mix up unrelated items.

If you stay consistent, the filing of documents and retrieving them from folders will be straight-forward. You will be telling which folders contain which information from a distance.

Make Labels

After every document goes to the right place, it’s time to label each file for easy retrieval. The information on the labels should be straight to the point.

The label for the folder containing invoices from Supplier X should read something like ‘Invoices – Supplier X’, and so forth. Since ‘Invoices’ is an item under ‘Accounts’, you expect invoices from Supplier X to be in a red folder, if we’re following our past examples.

You can consider buying printable labels from your local stationery store. They are neat and easy to work use.

Fill Your Drawers

Now that each file has a label and a color that matches its category, it’s time to fill them into the drawer. The first step is to sort the folders per major category in alphabetical order.

Then, position every category arranged into your drawers alphabetically. The labels must be visible without having to remove a file.

By implementing such this file management system, you will reduce the time required to file or retrieve documents considerably. The folders will be identifiable by color, the alphabetical order will lead you, and the label will show you the file you need.

File Management System for Digital Records

The concept of storing information in folders and categorizing them also applies in soft copies. Below are some best practices of proper file management.

Have a Consistent Way of Naming

Store all your files in folders and ensure that every file or folder has a name. The name should be descriptive and short to enable you to recognize the content quickly.

Divide the main folder into subfolders if the files stored are too many. Keep related records in the same folder or subfolder.

Don’t Overfill Folders

Even with subfolders, sometimes you have to save substantial amounts of related files together. If, for instance, you have financial reports for the last five years, you can create a subfolder for each year.

For example, ‘Financial Report 2015′, ‘Financial report 2016′, and so on. You can create multiple subfolders within subfolders. The essential thing is to maintain a logical flow so that you can get to the target folder effortlessly based on the naming system.

Don’t Save Unnecessary Files

Be selective when saving documents. Ensure that the content is relevant to your work before storing a file. Saving unnecessary files clutters your folders and makes it difficult to retrieve documents.

Organize Files by Date

Develop a habit of including the date in the file name. You will be able to organize your documents by time and improve retrieval time. This way, it won’t be necessary to open multiple files to find the one you need.

Store Completed Work Separately

Combining tasks in progress with concluded work can create confusion. Have a folder for storing finished work, and move everything that’s been finalized there. You can do this periodically depending on the volume of the work.

Create Soft Copies of Paper Documents

Too much paper poses a challenge in storage. The office can also look disorganized if you cannot manage to file everything. So, convert some of your paper copies and files into digital documents. You can use cloud computing to store other office documents.

Scanning of vital documents is an excellent way of saving the content. You can also keep a softcopy when you don’t need the material at the moment, but you wish to archive it.

File Management System – Wrapping Up

The secret of file management is consistency. If you don’t adhere to the principles of your file management system, it can collapse in a few weeks.

Store documents in the right folders and purge any unnecessary files, and you will stay free of undue stress.

For business information, check out our business advice section to learn even more.