The importance of successful document management

Most business owners never even consider the necessity proper document management systems until they have a room full of miscellaneous files or a dozen file cabinets taking up half of their office. There are many reasons why document management is important, and many risks associated with not managing files properly.

The average organization adds new documents to their load daily. For some, their document pile grows every hour, and document scanning often falls behind. Items such as e-mails, contracts, internal memos, and project plans are only a few of the many documents that businesses must deal with, store, and have access to at a moment’s notice. Forrester estimates that there are over a billion photocopies made every single day, and according to Gartner, the amount of paper produced by the average company is growing by 25%. There is a great importance of documentation in the workplace, but many businesses cannot afford to sacrifice an additional 25% of space to manage their documents. In this article, we will explore the many reasons why document management is important and give you a handful of helpful tips to manage your files more effectively.  

What Happens When Documents Aren’t Managed Properly?

Why Do We Need Document Control - Employee frustrated with documents

The refusal to implement a successful documentation management strategy can be extremely risky to an organization. Unfortunately, the majority of businesses do not specialize in document storage and retrieval, and therefore, document management becomes a secondary thought until an urgent situation arises and a critical document can not be found. 

One of the biggest failures that arise from improper document management is the loss or misplacement of documents. Without an effective system, physical documents can be lost or destroyed in numerous ways, from employee mismanagement to natural disasters. Chaos can strike from an employee mishandling a single document, or from a flood destroying thousands of improperly stored files. For some organizations, specific documents are pulled in order to make operational decisions. If these documents have been misplaced, it may result in decision makers being ill-informed when making critical business decisions.

Equally as damaging is the inability to retrieve files when they are needed. For some businesses, like medical doctors for instance, pulling client files instantly is necessary. Disorganized files are hard to retrieve. Customers get frustrated by having to wait for files to be found, and may begin to have a negative perception of the business’ customer service efforts. A company’s reputation is built on customer service, and can be damaged by excessive wait times due to an inefficient document management system.

Documents can pile up quickly. Business owners often disregard the amount of space that documents can take up if they are not stored correctly, frequently, and in a systemized manner. As businesses grow their operations, their document capacity typically increases exponentially. What often doesn’t increase however, is the space that the business is willing to dedicate towards file storage. One file cabinet can quickly turn into a dozen for a well-growing business. Not only does this mean that there is less space available for operations, but it also leads to a cluttered workspace. Studies have shown that a cluttered environment decreases an individual’s ability to focus and limits their brain’s ability to process information. In simpler terms, as your workplace becomes more cluttered with unmaintained documents, your team may become less focused and performance may lack.

Managing documents on a “whim” and without a consistent strategy can also lead to unforeseen costs and expenses. Owners and managers rarely calculate the amount of labor that goes into scanning, storing, managing and retrieving files. A three-minute average for a receptionist to find a client file may not seem costly, but that three-minutes multiplied by 20 customers per day can become an extreme expense over a week, a month, or a year.

The worst possible scenario for an unmanaged document situation is if critical documents end up in the wrong hands. Some files may have confidential business information or contain client information that can be used to exploit customers. In a mismanaged system, information may be unknowingly open for external and internal breaches, or even for remote hacking of electronic and digital files. This level of mismanagement can hurt a brand’s image severely, and may result in lawsuits and financial strain.

The Advantages of Having a Document Management System

Document management is important for any organization that handles documents regularly. There are many benefits to companies that take the necessary steps towards implementing or improving their system. If integrated properly, a great document management system features:

  • Security – Proper document management ensures that files are secure and that access is restricted and regulated. As a result, companies are able to relieve themselves of threats of information breaches, and the lawsuits that may accompany them.
  • AccessAn organized management system is easily and quickly accessible. Files are stored in such a way that they can be pulled immediately and within a matter of seconds.
  • Fixed CostsManaged document systems are cost-predictable. Since the process is defined, costs can be estimated more accurately and with less variance. Better financial control allows companies to better maintain their costs, to save money on unnecessary expenses, and in the long-term, to increase profit margins.  
  • CompliancyBusinesses that store certain types of documents are required to comply by several federal regulations and guidelines. Proper systems are built to consider each of these regulations, and do not have the worry of being deemed non-compliant by the government. Not only does meeting this federal compliance ensure that your business is protected legally, it is also a comfort to customers who are concerned about having their information on file.
  • SpaceOne of the greatest benefits of document management systems is the space that is saved. Commercial and office space can be extremely expensive. Every square foot used for storage comes with a direct cost, and an opportunity cost of revenue that could have been earned had that space been used for something else. A proper management system stores files with a systematic approach to reduce the amount of required storage space. Whether choosing to convert all documents to digital files or deciding to store documents off-site, maximizing office or workspace adds value and eliminates distraction from unnecessary clutter.

The Challenges of Managing Documents On-Site

Every business owner knows why document management is important, most of them just find it too difficult to develop and implement a plan that actually works. There are three main reasons why implementing a successful on-site document management program can be extremely challenging for businesses:

  • Resources: There are very few businesses that hire employees specifically for the task of managing documents. Instead, employees who manage documents spend valuable time that could be used for other tasks that may have more financial value for the organization. Time is valuable, and organizations may find it challenging to allocate the time of their employees towards properly integrating a successful office file management system.
  • Scale: Businesses may have developed a simple document management system for dealing with their current number of documents, but as their business grows, their process may not be able to support the increased quantity of files. It may be simple for a business to store hundreds of files on-site, but they may become overwhelmed when those files multiply.
  • Consistency: Maintaining an internal document management system can be difficult. It is critical that each staff member is trained on how information is to be collected, stored, and retrieved. Additionally, the operation of the program must be managed, ensuring that each employee regularly follows the guidelines of the program. Any errors or mishaps with an on-site program fall on the company itself, and the responsibility for solving these errors become the responsibility of management. Even with the best internal system in place, businesses may find it extremely challenging to effectively manage.  

How to Manage Documents Better

There are many elements involved in managing documents on-site. When developing your document management strategy, consider the follow tips:

  • Review Compliance Guidelines – Depending on what type of files you are storing or processing, it may be necessary to examine any laws to ensure compliance. Make sure you are aware of what legal considerations must be made before developing your management plan.
  • Systemize the Process Make sure that all staff is thoroughly trained on each step of the document storage and retrieval process. Systemize the entire process for efficiency to minimize the time required for each management task.
  • Consider Digitizing FilesTo save space, consider an electronic solution, such as a paper file management software. Instead of storing documents in file cabinets, scan them and store them in the cloud. A cloud drive is best for this application, as hard drives can potentially crash and destroy the information stored on them.
  • Shred Unnecessary DocumentsRefrain from hoarding documents that are outdated or no longer needed. Never take the risk of tossing out files that may contain confidential information. Instead, purge your files regularly of these documents and shred them to ensure that the information can no longer be retrieved.
  • Safe/LockboxDocuments with high-level confidentiality should be stored securely in a lockbox or safe to protect it from any potential of exposure or disaster. General files that do not contain critical data may be safe in a locked file cabinet, but discretion is necessary.
  • Identify Costs: Don’t ignore the costs associated with your on-site program. Seek to identify exactly how much your program will cost in terms of storage fees, labor fees, and opportunity costs, and optimize your budget over time as you learn more about the performance of your program.

How to Implement The Best Document Management Program

Even with these tips, on-site document management can be an extreme challenge to business owners. Document Storage and Scanning services exist to relieve organizations of this burden. Specifically, off-site storage and management allows companies to focus on the aspects of their business that they specialize in, and put their document management requirements in the hands of a provider that already has the internal processes needed to manage their documents.

Need to find a great Document Management Company? Docudavit provides a wide-range of services to address all document storage, scanning, and management needs. Contact Us to discuss how our services can help you manage your files easily, and without the burden of an on-site solution.