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3 Steps to Creating a Document Management System

Part 1: Document Management for Small Business


3 Steps to Creating a Document Management System

File Folders

Courtesy stopnlook

If you type “document management” into any search engine, you'll get long lists of document management “solutions”, many featuring software that advertises the advantages of having a paperless office.

Document management software, however, is designed to improve your business’s handling of electronic files. The problem is that many small businesses have to deal with mixes of old-fashioned data on paper and electronic files – and in many cases, the proportion of paper data is much larger.

One solution to the problem of having a mixed data environment would be to use a document imaging system to convert all of your business’s documents to electronic form. But this is too expensive and time-consuming for many small businesses.

The good news is that you can put the basics of a document management system in place without purchasing any special software or going through wholesale document imaging. The system doesn't have to be complex; you just have to invest some time in planning and implementing it.

The Basics of a Document Management System

Setting up a document management system involves three steps;

  • creating a document management plan,
  • implementing the document management plan,
  • and following through.

The first step, creating the plan, involves answering these four questions:

1. What are the rules for creating documents?

Invoices, payment reminder letters, sales brochures, email, balance sheets, spreadsheets, reports – All businesses create a variety of documents in the course of doing and keeping track of business. And to keep things organized, all businesses need to establish rules about creating documents.

For instance, are there in-house templates for some of your standard business documents, such as letters and invoices, and where are they located?

Is there an in-house style guide that needs to be followed?

Should new documents be dated and/or time-stamped?

What procedures should be followed for sharing or reviewing documents?

For some small businesses, the only point about document creation that matters will be where the templates for various business documents are located and how to use them. But if document creation within your business involves different people collaborating on, reviewing or updating documents, you’ll need to spend some time deciding how these things should be done to ensure efficiency and consistency.

2. How will we store documents?

There are actually two aspects to this question. The first involves the physical aspects of storage. Even if your small business is storing documents in filing cabinets, there are costs associated with storage; not just the cost of the filing cabinets themselves, but the cost of time when you and/or your employees file documents or go to retrieve them. In fact, the largest cost associated with storage, for most small businesses, is probably the cost of the time wasted when people are looking for documents.

The second aspect of storing documents is organizational; how will documents be filed? The key to filing documents is to follow good file management practices. Jill Chongva explains how to set up a filing system for fast and efficient filing in Mastering Your Filing System while 10 File Management Tips explains how to keep the files on your computer system organized and up-to-date.

As a corollary, you need to know how you’ll archive documents. You need to decide how you’re going to handle files that are out of date or just ready to be moved to the back burner in your document management system.

Near the beginning of each year, for instance, I go through the various work-related files on my computer, weeding out those that are no longer current, and create new folders labeled by year and/or subject, moving files as needed.

The same can be done with paper files; it’s not difficult to remove old(er) documents from a file folder and label and create a new one with “Old” in the title. Some software offers automatic archiving options. Microsoft Outlook, for instance, allows you to archive old email.

The other two questions that you need to answer to create a document management plan are on the next page. Click to continue reading.

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