Back to Basics: Fool-Proof Filing Everyone Needs to Know

File Management
Document Retention

Basic Fool-Proof Filing Everyone Needs to Know to Avoid Data Confusion

Whether it's pesky piles of paper that are getting you down or you're facing a digital document disaster at work, efficient filing is the only way to truly tame the chaos. Our world is full of data and that data has to go somewhere. Spreadsheets, notes, reports, records, meeting minutes, and legal documents all become one thing: documents. Documents become

files and files (as their name suggests) need filing or else chaos and anarchy will reign! Well, that may be a little over-dramatic, but misfiling and inconsistent arranging of files can certainly result in a whole lot of inconvenience and stress.

With a view to being helpful, here is our guide on how to file, manage, and organise your documents so you never struggle to find a file again. Whether you're wading through physical or digital documents, we can help you make your system efficient and minimise the time wasted on filing and finding documents.

Computer showing hidden depths as a digital filing system

Why Does Efficient Filing Matter?

When you're dealing with paper documents, inadequate filing systems can cause irreparable damage that can lead to serious awkwardness when the audit officer comes a-knocking. In terms of GDPR and data compliance, businesses are now solely responsible for the protection and timely destruction of their internal and external data. Laws govern which types of information you can and cannot store and for how long it is ethical to keep.

Paper filing sure has its drawbacks which is why most companies have at least started the process of going paperless and switching to digital files. However, if you're struggling to find workarounds for physical paperwork and want to keep those document files in an orderly fashion for ease of work, then fear not. We're here to help. Similarly, if your company has fully embraced the age of digital transformation and you're looking for ways to make your virtual filing cabinet a well-ordered Tardis of data and information, then great! We've got the goods to ensure your digital filing system is squeaky clean and easy to navigate for everyone.

What Are the 5 Ways of filing?

There are generally considered to be five main ways of organising files, regardless of whether they are virtual documents or hard copies. Any of these should be a good place to start when implementing a company-wide filing system for paper files and electronic files alike.

  • By subject - categorise files according to the subject of the contents of the document. This is a logical way of organising files because it groups documents that are similar in topic or structure.
  • Alphabetically - even within larger categories, filing things alphabetically can make more sense for the next person who wants to find something. Many electronic filing systems already do this within digital folders.
  • Numerically - depending on what the majority of your documents contain, filing by number can make a lot of sense.
  • By place - This won't apply to every industry sector or business, but for files that are to do with a specific location or place, it can make sense to order them by location.
  • By date - This is a pretty common method of filing documents. For example, filing financial documents by year will reduce the time wasted scrolling through records from past years.

The Filing Hierarchy

Most companies will choose to combine two or more of the above options to organise documents and groups of documents. This is fine, but it's important to set a standard that works across the whole company so that everyone can understand and use the same set of rules.

This will be vital when it comes to retrieving files at a later date, especially if the person trying to find the document wasn't the one who initially filed it. The order you choose has to be logical for the types of documents you typically use and the most important filing criteria should start the file title so that it's easy to identify later.

For example, if you had an estate agent firm or property business, you might decide that the most important way to divide files is by location (location, location). You could create folders for each country, city, or individual address where properties associated with your company are. You may then want to further sub-divide files within these folders again by date or more specific location to help distinguish between types of documents.

Typically, you wouldn't want to use more than three filing methods in your hierarchy, or it will get too confusing for everyone to remember. As with many things in life, simplicity is often better and this will certainly help avoid misfiling which can be extremely frustrating for those trying to find the file later. In short, you need to balance having a descriptive file name, with having a simple system.

Here are two examples of filing formulas that use three filing criteria to file documents for their business:

Filing hierarchy pyramids A and B

The bottom of the pyramid is the first priority and the first part of the file name. Then you work up the pyramid.

  • A file name using filing hierarchy A might look like this:
    Susan Jones tax return 2022' OR 'CJ Construction employee handbook 2016'

  • A file name using Hierarchy B with index numbers as the priority criteria might look like this: SJ12001 2022 tax return' OR 'CJC4503 Jan 2016 employee handbook'

You can either assign index numbers to each case, task, or client or perhaps you use software that generates this field for you. In any case, the index code should feature in the file title.

Consistency Is Key

Whichever order your filing hierarchy is in and whichever fields it uses to file information correctly, the most important thing is to make sure all employees are indexing, and formatting the file titles in a consistent way. If you do choose to use client or case reference numbers, as in filing hierarchy B, you must make sure that these indexing numbers are available for all people in the company to view. A spreadsheet with each client's name next to its relevant index code would suffice, as long as that, too is filed correctly.

If you take nothing else away from this article then hark at this - inconsistency in filing = data chaos.

Therefore, it matters less what your filing hierarchy is than making sure everyone is using the same filing method.

Principles of Paper Filing

While many industries are well on their way to becoming fully paperless, others have struggled to make the switch. Paper prescriptions, legal contracts, and financial documents are amongst the worst offenders that stubbornly resist digitalisation. If you're in one of those industries where the paperless office is nought but a distant dream then this bit is for you.

Woman feeling overwhelmed by paperwork

Get a System

As we said earlier, you can choose any method of filing, as long as it's simple enough for everyone to adopt and general enough to be used for all documents company-wide. Implement a system and make sure people stick to it.

Be Ruthless

Statistics say that once a document is filed, there is a 95% chance of it ever being retrieved. That's not because admin staff are daft or that they're shoving it all in the filing cabinets without a recognised order. We love you, filing wizards! No, the reason why only 5% of filed documents will ever feel the sunlight on their ink again, is that we only need to retrieve those few files again.

There are some types of files you are obliged to keep for data protection and audit purposes, but before you file six copies of meeting minutes from an internal meeting, think logically. Don't file what you don't need to. It only becomes someone's job to shred it at the end of the retention period, maybe even yours.

Get the Right Tools

A poor workman blames his/her tools, or so we've heard, but without the proper tools in place, your filing system could result in an audit disaster with no one to blame but you. Some of the items you'll need to invest in to keep a well-ordered paper filing system are:

  • Plastic wallets, folders, dividers, and paper - a lot of it
  • Industrial scanners, printers, and printer ink - a lot of that too
  • Stationary, including (but by no means limited to) pens, pencils, paperclips, file ties, hole punchers, and the tiniest of tweezers to pick up all the tiny paper doughnut holes off the carpet when you're done with it
  • Giant, metal filing cabinets to protect your critical documents from typhoons and other disasters
  • And of course, you'll need some sort of mild sedative on hand for when the paper tray in the printer starts jamming every third use

With a steady supply of all these items, plasters on hand for papercuts, and a lot of patience, you can continue to run a paper-full office for some time to come.

Then again, why would you?

Paper Vs Digital Document Management

Alternatively, for a paperless office to work you will need the following items:

  • A quality document management system such as Virtual Cabinet
  • A small reliable scanner to convert paper documents to digital files to put in it

You get the point. Just because you can archive paper files efficiently with collective, consistent filing techniques, it doesn't mean you should continue to do so.

Although we don't deal solely with accounting professionals Virtual Cabinet has a very real presence in the accounting world. One profession that is widely recognised to be one of the hardest to turn paperless, but we help businesses go paperless every day. It not only benefits the environment and reduces your costs, but a great Document Management System can and will save you more time than you'll know what to do with in your work day. Who doesn't like the sound of that?

Final Thoughts

If you're reading this, then we dare say we're preaching to the converted regarding paperless offices, but it's never a bad idea to take stock of what paper is being produced by your business or coming into your office from external sources. Can outgoing and incoming post be reduced, or client documents be sent electronically through a portal?

Whatever stage your paperless journey is at right now, you can use our filing tips to create a company-wide, consistent file naming hierarchy that will ensure you can always find what you're looking for. Alternatively, of course, you could just let Virtual Cabinet index and automatically file your incoming documents without any fuss. VC has powerful integrations with dozens of other software systems, automatic email capture, and everything you need to keep your audit trail squeaky clean.


What Is a Document Management System?

A document management system is a piece of software or application that allows you to digitalise your documentation. Essentially it acts as a virtual filing cabinet to store your documents, notes, and digital paperwork in an ordered and accessible way.

The key benefits of having a document management system implemented in the office are that it reduces waste, office stationery costs, and time wasted by staff trying to retrieve files.  If you're interested in reducing your business's carbon footprint and future-proofing your filing system then a quality digital document management system is an extremely logical investment.

Are Electronic Filing Systems Secure?

We can't speak for other providers, but Virtual Cabinet's document management system is extremely secure. All due care is given to ensure that your sensitive information is secure and inaccessible to users outside of your organisation. Not only that, but you are able to set user permissions within our document storage software so you can control who can access confidential and protected information. Therefore, not only is our digital document management system more secure than a traditional filing cabinet, but it's way more audit-friendly since you can always look back and see who viewed or edited a particular document or version of a document.

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