Any business will generate important documents that must be stored either for internal operations, reference by clients or to comply with government regulations. In the past, filing cabinets typically lined the walls of every office. As technology has evolved, so, too, have document management methods. However, while document management might seem like a straightforward concept, there is often more to it than meets the eye.
Understanding how to properly establish and maintain a digital archive is critical to keeping your documents secure, accessible, and adaptable to your business's needs. Document management can generally be broken down into three broad categories. Small businesses should carefully consider each category to ensure that company operations are streamlined, your critical files can be easily retrieved and that files are secure. These tips will help you get it right the first time.
1. Digitize documents with document management systems.
The first step in establishing a digital archive is scanning documents or importing your existing records into a centralized system. Document management systems are designed to make it easier for you to establish and maintain a complete digital archive of the records your business requires.
"Records can be scanned when they are received or being processed … or you can assign an internal employee to scan in batches on an agreed-upon frequency that can range from daily to annually," said Jim Collins, president of Chicago-based document imaging company Datamation. "If you prefer not to use internal resources, you can outsource this work to a document-scanning service bureau who can go through your records, batch-scan everything and deliver you the digital files."
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Digitization of paper records begins with a process known as document imaging. Imaging involves scanning documents into your document management software. Most document management systems use what is known as optical character recognition (OCR) to automatically identify and index documents based on their content.
"Today's OCR programs are extremely intelligent, and can accurately detect a high percentage of printed and handwritten text," said Faith Kubicki, content marketing manager for document management company IntelliChief. "That said, each program's accuracy rate depends on the quality of the document that's being put into the system. If pages are smudged or stained, or images are blurry, the program may have a harder time recognizing the information."
While much of the digitization process can be automated through document imaging, accuracy is essential. The next step of digitizing your archives is establishing a system for quality control.
To ensure your documents have been captured correctly, many document management systems allow you to set a "custom confidence rate," which means the software only accepts files that meet that threshold. For example, if the software believes it has imaged a document 90% accurately, but your custom confidence rate is 95%, that document would not be accepted without manual review and approval.
"All records that are digitized must be quality-control reviewed for accuracy, integrity and completeness," Collins said. "This can be done either right at scanning or after by checking the images."
Additionally, remove staples, paper clips and other obstructions from paper records before scanning them into the system.
2. Organize digital files for easy retrieval.
Once you have digitized your documents and imported the digital files you need, you should organize them for easy retrieval. The documents in your archive need to be easily accessible – just as you wouldn't want to search multiple file cabinets for a specific document, you don't want to pore over a vast, disorganized digital archive.
Luckily, most document management software begins the organization process for you with OCR. The software identifies certain keywords and elements in the document and affixes metadata that automatically indexes documents for you. However, to be truly organized and accurate, it's wise to further delineate documents from one another by adding more details and metadata manually.
Just as you would use physical folders in a file cabinet, you should organize your digital files into clearly named digital folders. This way, when you open your digital asset management software program, you're not looking at a disorganized, overwhelming list of files.
You should divide your files into different folder categories. For example, create folders for clients, suppliers, internal finances, taxes, employees and whatever other broad categories apply to you. You should also house subcategories under each category. For example, in your Clients folder, each client should have a subfolder, as should each month of your work for the client.
This logic applies to not just your folders but your files. You should develop consistent nomenclature standards for your files that keep them arranged in logical order within your folders. This could mean storing a document containing the first part of a project with the number "1" at the start of the file name. It could also mean storing invoices with the month leading the file name so you can more easily access your most recent invoices.
You have two options for storing your documents: on-premises servers and cloud-based platforms. On-premises servers demand a higher upfront investment and in-house IT resources for ongoing maintenance. But, they give you greater control over your documents, and they fall under the umbrella of your security measures. Cloud-based platforms remove the burden of maintenance and generally cost less, but you're trusting a third party to manage your data for you, potentially creating additional vulnerabilities.
"Both [on-premises and cloud storage] options are viable, but the cloud provides an automatic off-site backup," Collins said. "This is increasingly becoming the storage choice for most companies. Most cloud sites are certified, secure and very efficient."
It's important that you research cloud storage providers and ensure the one you have in mind meets your standards for security. Collins recommended maintaining a backup of your records and systems.
"This backup can come in many ways, such as having a scanner to scan and archive records, storing important files in multiple locations, and establishing policies and practices to capture documents and keep them secure as a regular practice."
Your archive contains all of your business's critical documents, including the most sensitive ones. As data breaches become more common, it should be a top priority to ensure your archive is as secure as possible.
"When selecting a software program, small businesses should also look for configurable firewalls, active directory authentication and SSL technologies," Kubicki said. "They should also find a system that provides them with a comprehensive, uneditable record of every single time a document was accessed (and by which employee)."
In addition, most document management systems include user access permissions, which allow admins to determine which users can access, or even see, certain files stored in the archive. This helps keep vulnerabilities to a minimum for confidential information.
"It's important for small businesses to customize their access permissions, especially when multiple departments are using the same document management system," Kubicki said. "This ensures that financial data stays within accounting, sensitive employee information can only be viewed by HR, and so on."
Understanding how long you should retain certain documents helps improve security and free up storage space. Some documents don't need to be kept permanently, while others are important enough to retain.
"Most documents shouldn't be stored in perpetuity," Kubicki said. "For instance, the IRS recommends that small businesses retain financial records for seven years. But when it comes to internal business documents, like supplier contracts and customer order records, it's normal to retain those for longer."
Following all of the above steps is just the start of implementing new file management practices. To ensure that you achieve proper file organization for your small businesses, you should also educate your colleagues on your file organization methodology.
Establishing a concrete file organization system begins with outlining consistent filing practices. The system you set up should encompass all the procedures and considerations listed above. Once you determine how your company will adhere to these best practices, commit your procedures to writing, perhaps in your employee handbook.
Supplement your written protocols with training on how to follow the guidelines you've put in place. With both firm systems and an educated team, digital file organization for your small business should be hassle-free.
3. Consider collaboration features.
Finally, once your archive is fully digitized and organized as to be easily accessible, your team needs to be able to revise documents quickly, without creating contradictory edits. The best document management systems have built-in tools to help teams collaborate.
"Good systems will track versions of all content, allow multiple simultaneous access to the same documents, and facilitate production collaboration," Collins said. "For more complex applications, workflows can add structure and accuracy to defined processes through routing, approvals, signatures, checklists, and reminders."
Collaboration tools help your team work seamlessly together within the document management software, as well as prevent contradictory edits from occurring on a document when multiple users are trying to access it. These tools are essential for teams that aren't just storing files, but are constantly revisiting and reworking them.
Additional reporting by Max Freedman. Some source interviews were conducted for a previous version of this article.