Document Management Best Practices

How to avoid costly mistakes and set yourself, and your organization, up for success.

December 29, 2020

Article highlights

Companies thrive on information and data: Manufacturers measure output and defects, marketers measure campaign results, and retailers measure sales and returns. But a company is more than just their analytics and financials. They need proprietary information, intellectual property, and the various policies and procedures that tell them how to operate.

If data is a company's lifeblood, information and policies are its brain. And companies produce so much data, information, and policies these days, a traditional paper-based filing system is no longer enough to contain everything.

The interconnectedness of the information is often too complex and cumbersome to be handled by traditional means any longer. Many organizations – whether nonprofits, government agencies, law enforcement agencies, healthcare systems, or corporations – are switching to an electronic document management system to handle the information output. And in this article, we hope to show you some document management system best practices.

What is a document management system?

In its most basic sense, a document management system is a way to manage and store business data. It can be an old-school file-and-folder method, or it can be a cloud-based software-as-a-service (SaaS) solution.

With today's technological capabilities – fast computers, broadband internet, machine learning, and artificial intelligence – most organizations are adopting a paperless document management system by switching to an online solution, and it's saving them time and money.

Switching to a digital system can boost a company's productivity. In fact, 82% of employees say their productivity has suffered because of poor information management. And just eight years ago, McKinsey & Company reported that employees spent 1.8 hours per day, or 9.3 hours per week, searching for and gathering information. In other words, imagine if every employee only worked four days a week because their fifth day was spent gathering information. Or if only four of every five employees worked because the fifth was gathering information. Talk about inefficient.

A document management system can decrease printing and storage costs as well. We estimate it can save as much as $800 per employee per year in paper and printing costs alone. Not to mention another $1500 per year per 4-drawer filing cabinet used to store all of that paper.

A digital system can help improve security, protecting valuable intellectual property or personal information from prying eyes. Additionally, for many industries, document management system best practices play a key role in accreditation compliance and risk management.

Document management best practices

If you want to avoid costly mistakes and set your business up for success, follow the document management best practices below.

Consistent folder and naming structures

As employees create thousands of files and folders regularly, they often use their own file names and folder structures. They might have the best intentions in doing so, but when it comes to creating files and folders in a shared space, it's easy to see how problems can arise immediately. People can forget their original naming structure or they may not understand proper filing protocols.

This can create serious headaches when trying to find specific files, which is why people spend an average of 1.8 hours per day searching for files.

Good document management begins with your naming conventions and the standards you set in the beginning. There's no right or wrong way to name a file, you only need to find what works best for your organization. 

In fact, one best practice is to create a template that guides all employees in how they should structure document names. This provides uniformity and consistency throughout the organization. When everyone follows the same format, that makes finding the right information a breeze.

Reduce version confusion

A common issue for many office workers is version control – as many as 83 percent of them have daily issues with versions. Some document sharing platforms don't handle collaboration too well, and will let collaborators create several different versions of the same document as they make their own updates and edits.

One best practice is exercising true document collaboration, letting several people work on the same document. As items get changed, the changes are reflected for everyone in the same document, and the document history is archived for future reference if needed. No more "checking out" a document to change it, resulting in dozens of previous versions stored on the same server. No more trying to sort through seven different versions of the same document.

This functionality also helps take the guesswork out of policy changes. As new changes are made, managers can be assured that employees are seeing the latest versions of a new policy, even as administrators are able to access previous versions for their records.

Document and signature tracking

Some documents need to be tracked in terms of who has seen and acknowledged them for compliance purposes. Others need to be confirmed as being the latest, most up-to-date versions. 

A best practice is to track your documents, manage where they are in their life cycle, and identify whether they're active, archived, or ready to be purged. It's especially important for high-liability, regulatory documents that need to be updated or removed on a regular basis, or policies that need to be updated to reflect the latest accreditation requirements.

Finally, a document management system should allow employees to acknowledge the new changes with a digital signature. This can not only improve productivity, it can result in an 86% savings in documentation expenses.

Set up approval workflows

In addition to simplifying version control and acknowledging policy changes, a good documentation management system will streamline the process of creating, updating, and filing critical documents.

You should be able to create an approval workflow to ensure that the right people have read and approved the necessary documents. Rather than routing a printout to all stakeholders in a new policy and waiting weeks for signatures, you can set up an approval workflow that will not only ask people to read and sign a new document, but show you if and when it has been read and signed by each person. This ensures that no one gets skipped and nothing falls through the cracks.

It also lets you spot the bottlenecks in an approval process so you can remind them to review and sign the document. This helps your employees stay on track and that the proper steps are followed each time. This can cut approval time turnaround by as much as 80 percent.

Mobile access

Many people are working on their phones these days, even if it's just to read a document, share it, and sign it. Whether it's a salesperson closing a deal or remote workers or field personnel who need to acknowledge a new policy, being able to access and sign a document on a mobile device is a real time saver.

Without an easily accessible document management system, employees often have to wait until they're in the office or in front of their computer again. That wastes time and increases approval times and exacerbates versioning issues.

Best practices mean making document retrieval quick and accurate while also meeting employees’ needs wherever they might be working.

With an increasingly mobile workforce, you need software that is flexible enough to meet the needs of remote employees. They should not have to be at their desks or connected to the internal network to access or review a document. Put information in their hands so they can easily and effectively do their jobs

Storage

Due to the regulatory and legal issues many industries face, businesses have varying retention policies that specify how long they have to keep certain documents. Some companies keep documents right up to the limit and then dispose of them. Other organizations will rent warehouse space to keep documents that last for the life of the company.

What would it look like if you could convert to an electronic data management system that could be accessed from anywhere in the world? What would your need for commercial space look like if you could reduce your onsite staff by even one-third? What kinds of office requirements would you have if all your information was stored in a highly-secured cloud-based document management system that could eliminate the need for most physical paperwork?

How to get started

Now that you understand some of the best practices, it's time to start evaluating your current document management procedures. Are you following these best practices? Can your current procedure handle improvements and upgrades? 

Are you using a paper-based management system, or are you relying on a functional-but-simple online storage system?

PowerDMS can help you evaluate your current system and see how an electronic document management system can save you time, money, and even space. Our robust document management software manages policy lifecycle, drives accountability, tracks revisions easily, and provides secure on-the-go access.

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