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How To Manage Documentation as a Business Owner: 6 Best Practices

As a business owner, it’s important that you understand how to organize your business across all departments. An electronic document management system or EDMS ensures that employees can access important documents quickly and efficiently. Read further to learn how to manage documentation as a business owner and why EDMS is important for your business.

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What is document management?

Document management is the process by which a company transfers paper documents into a digital format before placing them into organized categories in an electronic filing system. Authorized individuals can access important documents such as employee information sheets, financial statements and inventory and budget statements. An EDMS also allows authorized staff to access photos and media to perform their job duties.

Why is it important to properly manage documentation?

Proper electronic management of company documents is essential in today’s business world. While a paper system may serve as a reliable backup, digital document management helps ensure that company records are kept safe and remain accessible at all times. Additional benefits of utilizing an electronic document filing management system include:

  • Quick access: Whereas paper filing systems may take a while to go through, electronic filing systems allow users to search by document type, file name or category. This is highly beneficial for a business’s overall productivity because users can access files within shorter time frames.
  • Better record keeping: Paper filing systems may become disorganized and some documents might get lost. Digital filing systems ensure you have easy access to years’ worth of documents.
  • Enhanced security: Paper filing systems are often locked or stored in authorized locations, while digital filing systems allow businesses to set up usernames and passwords to limit and control access to certain files. You can even create alerts for potential hacking or unauthorized activity to protect your company’s information.
  • Fewer geographic restrictions: If you offer remote employment or have more than one office location, a digital document management system is a great way to ensure employees have access to the same information.

6 best practices for determining the right document management system for your business

Here’s how to determine the right document management system for your business:

1. Identify your goals

Document management systems offer varying formats and features to fit the specific needs of businesses. Start by determining the document filing needs of your company. For example, an owner of a small, independent business may choose to transition to a basic EDMS they can access from their home or office to safely store a small number of receipts and tax documents. Alternatively, a large company with hundreds of remote workers may require a complex system that allows authorized users to access important employment documents from various remote locations.

2. Review your company’s size

The overall size of your company, along with the number of departments and staff members, can help you determine the appropriate system of file management for your company. Smaller businesses with minimal staff and fewer departments may benefit from a basic system to manage documentation such as employee records and payroll, while large companies and corporations may need more complex systems that work across multiple departments and store many important documents and files.

3. Think about who will be using the system

If your EDMS will be utilized by employees with varying computer skills across several departments, it’s important to choose a system that’s user friendly and easy for every employee to operate. If you’re investing in a filing management system for your company’s human resource department, this type of file management software generally includes complex features that allow HR staff to manage payroll and access confidential employee records.

4. Think about where they will use the system

If you want to handle filing system management tasks from multiple office locations or by using diverse formats such as mobile devices, it’s important to invest in a filing system that can be accessed via apps and different types of computers (e.g., Macs vs. PCs).

5. Identify your budget

Document management systems offer a wide range of features that can vary depending on the overall cost. If your budget is limited, the good news is that you can still purchase a basic filing system that helps you easily manage documentation. By identifying your budget, you can determine what type of management system you can afford. For example, if you want to purchase a new filing system that allows you to integrate with current or older systems, you may need to expand your budget to match your needs.

6. Review your industry

Certain types of document management systems cater to particular industries. For example, retail shop owners can invest in retail document management systems where they can document wholesaler information, inventory and sales receipts, while human resource document management systems allow for electronic storage of payroll documents and employee files.

Tips for setting up and maintaining a document management system

Review these tips on document management processes when setting up and maintaining your company’s document management system:

Change system passwords often

Changing the system’s password regularly helps keep confidential documents secure at all times. Changing the password also prevents past employees and individuals who no longer have access to the system from unauthorized log-ins.

Back up your system in multiple places

While electronic document management systems are highly efficient at storing important documents and data, there are still instances in which electronic outages, human error or system glitches can cause the system to shut down. It’s important to invest in storage software or hardware to ensure you can regain lost files in the event of an unforeseen outage.

Perform a digital audit to measure security and best practices

Ask an IT professional to review your document management system to identify potential security loopholes in the software or management tactics. They can help amp up your security and establish optimal cybersecurity best practices to prevent unauthorized access to the filing management system.

Clean out unnecessary documents for storage and organization

To ensure your system of file management has enough storage space and runs efficiently at all times, it’s a good idea to clean out unnecessary documents at least once every few months. This helps free up storage space and allows for quicker access to files. For example, you can delete employee information one year after the end of their employment. In contrast, tax information should always be kept on record for recall longer than a year.

FAQs about managing documents

What is a document management process?

The document management process includes a digital workflow that takes documents, analyzes their contents and sorts them into digital categories or folders for quick and efficient organization.

How do you create a document management system?

You can create an effective document management system by introducing efficient organizational habits and procedures within your company. Combine these practices with document management software to help elevate the process of digital document filing among departments.

What are the three types of filing classification systems?

The three types of filing classification systems include:

  • Subject filing classifications (alphabetical): Sort files in alphabetical order
  • Numerical filing classifications: Sort files by file numbers or document dates
  • Alphanumerical filing classifications: Sort files in alphabetical order and by numbers or dates

What are some key essentials of a good electronic document management system?

Some key essential aspects of a good electronic document management system include enforced consistency of documents and increased product and process quality. Improved compliance is also a key essential of an EDMS, as employees can easily access regulatory updates and corporate mandate documents as they’re issued electronically.

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