How to create a document management system for small companies

Knowing how to create a document management system is essential for businesses. Small companies can also enjoy these benefits.

Document management is the process in which information is created, shared, organized and stored in an efficient and appropriate manner. Knowing how to create a document management system is essential for companies.

For many companies, the focus of a document management system is on the organization and storage of documents. They want to store documents in an organized and secure manner, making it easy to find documents.

If you type “document management system” into any search engine, you will get long lists of document management “solutions,” many of them with software or applications that extol the benefits of a paperless office.

How to create a document management system

Regardless of whether you use software or not, for your company’s document management to work effectively, it needs to follow some best practices. Answering these four questions will help you to develop a document management system:

What are the rules for creating documents?

Invoices, payment reminders, sales contracts, emails, balance sheets, spreadsheets, reports – all companies create a variety of documents during the normal operation of their business. To keep things organized, companies need to establish rules for creating documents.

For example:

  • Are there internal templates for some of your standard business documents, such as letters and invoices? Where are they located?
  • Is there an internal style guide that needs to be followed?
  • Should new documents include the date and time?
  • What procedures should be followed for sharing or revising these documents?

For some small companies, the only thing that matters in document creation is where the templates for different business documents are located and how they should be used. However, if document creation in your company involves different people collaborating, revising or updating documents, you need to spend some time on deciding how these things should be done to ensure efficiency and consistency.

How are we going to store documents?

In fact, there are two aspects to this question. The first involves the physical aspects of storage. Even if your small company is storing documents in filing cabinets, there are costs associated with storage- not just the cost of the files, but the time you or your employees spend filing or retrieving documents. In fact, for most small businesses, the biggest cost associated with storage is probably the cost of wasted time when people are searching for documents.

The second aspect of document storage is organizational. How will the documents be archived? The key to archiving documents is to follow good file management practices. How will you deal with files that are outdated or ready to be disposed of in your document management system?

At the beginning of each year, for example, I go through the different work-related files on my computer, deleting the ones that are no longer current, creating new folders labeled by year and/or topic, moving files as required.

The same can be done with paper files. It is not hard to remove old documents from a folder and create a new label with “old” in the title. Some software solutions offer automatic filing options. Microsoft Outlook, for example, allows you to archive old emails.

How to improve your document management system

How can document retrieval be simplified?

This question gets to the core of your document management system. Research shows that time wasted searching for important documents and information has a very high cost.

Once again, good archiving practices can help solve the problem. If you do things such as consistently following strict naming practices, the documents will be much easier to find.

Whether you are the sole owner working by yourself or a business owner with employees, create a list of file locations that will remind users where specific file types go and where to find specific documents. Remember to include whether the file is in the computer system, on an internal server, in the cloud or, if on paper, archived at a physical location.

For example, let’s suppose you use images, videos or even paper photos in your company. An entry in your file location list could be:

  • Digital images/video: computer (or server) – drive E: / photos – file in the appropriate topic folder
    Paper photos: filing cabinet 3 – Photos – by topic

Shared network or cloud folders should be labeled according to content, just as the drawers of a filing cabinet should be.

How can we keep our documents secure?

The first line of defense in document security is to physically protect the company’s facilities. All companies should have security systems installed, such as an alarm system – even home offices.

Companies may also want (or need) to invest in other security measures, such as installing bars or security cameras, or hiring security services. You can spend all the time in the world creating passwords and encrypting files to protect your electronic files, but it will not be very effective if someone can just break in and steal your computer and the hard drive inside it.

All filing cabinets should have locks and be kept locked after business hours (and locked at lunchtime if no one is around).

General security procedures for electronic documents include backing up documents on a regular basis and keeping backups of documents at a different location than the hard disk where the original documents are located. Off-site storage is ideal for protecting your data from natural disasters (another reason why the cloud is a great option).

Small companies with employees sharing the same computer network may also want to restrict some users’ access so that they can use or view only some of the network resources. For example, you might have a shared network or cloud folder called “Accounting” that has management-only access. Even if a user has permission to access a resource, such as an application, specific documents can be password protected. Document content can also be encrypted, making it accessible only to those who have the encryption key.

Information theft by employees is another threat to data security. As a matter of internal policy, small companies should vet employees and get a background check.

Implementing your document management system

Once you have answered the questions above and created your document management plan, you are ready to implement it, thus ensuring that your entire team knows the details of your company’s document management system and is following proper procedures for creating, storing and retrieving documents.

You also need to make sure that all users who access and use documents in your organization are in sync and naming and storing documents appropriately. To ensure this, periodically check if specific files can be easily found and if there are any filing errors.

Software solutions for small companies

Small companies can also enjoy the benefits of a software solution for managing documents, and without having to spend a fortune on it. Options like software-as-a-service (SaaS) and training via e-learning minimize costs and facilitate implementation.

Learn more about SoftExpert ECM and discover the benefits this solution can offer your company. We guarantee it will save you money and provide a speedy return on your investment.

Learn more about SoftExpert ECM

Tobias Schroeder


Tobias Schroeder

MBA in Strategic Management from UFPR. Business and market analyst at SoftExpert, a software provider for enterprise-wide business processes automation, improvement, compliance management and corporate governance.

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