What Is a Computerized Filing System?

What is a computerized filing system?

A computerized — or electronic — filing system organizes and stores your business’s files on a hard drive or network space. This digital system can be software- or internet-based, or a simple folder/file system on a computer.

“[Computerized filing systems] is a broad term used for any sort of system that allows documents or similar data to be structured and organized,” explained Tom Terronez, CEO of dental information technology company Medix Dental. “[These systems offer] a searchable, digital solution to paper documents and filing cabinets. They can vary from simple and basic to advanced and extremely robust.”

Why are computerized filing systems used?

The primary reason people use a computerized filing system is that it’s an easy way to safely store and organize files. This type of system can index your files for you. It categorizes and registers every document entered into the system based on specific properties that you can customize, such as file size or function.

“[Computerized filing systems are] IT systems that are meant for business papers’ archiving and controlling organizations’ data,” said Gregor Schneider, a strategy and digital consultant. “In contrast to traditional practices where documents are physically maintained in paper files, these systems use a computer program to file documents in a systematic order that is easy to locate.”

Computerized systems also offer greater options for securing your files and sharing them, making collaboration on shared documents easier for team members. They also make it possible to easily exchange documents with clients; document management statistics even indicate that using e-signatures on digital files can improve close rates.

How do you implement a computerized filing system?

Creating your own computerized filing system takes time, but that time and effort is worthwhile. The result is a well-thought-out and organized file management system with multiple advantages for your business’s operations.

Once you’ve decided on the platform for your computerized filing system (e.g., document management software, desktop folders), here are seven steps to implementing the system in your business.

1. Decide who will have ownership of your filing system.

If you are not personally overseeing the filing process, assign an administrative staff member to be responsible. Make sure your whole team is aware of what changes are being implemented and who is in charge of the process. This lets employees know whom they should go to with questions and who is the point person for keeping track of important documents.

2. Get organized.

Take inventory of all the documents your company has: how big they are, what their function is, how long they need to be stored and so on. Next, loosely organize your files according to their size, function and storage duration. This is the kick-off of your actual filing process, so think carefully about how you group your documents.

Keep your main goal in mind: to make it as easy as possible for someone in your organization to find a document quickly. Your digital folders should have a clear sense of order and should not be cluttered or hinder your company’s workflow. Be consistent in your labeling and separating.

3. Use subfolders.

You don’t need a main folder for every small topic. For example, you can make one folder for “Medical Records” and create subfolders within that category by month or year to keep your system orderly and uncluttered.

4. Decide on a naming convention and stick to it.

Naming your files is a vital part of the filing organization process. Proper and consistent naming makes it simple for anyone in your company to quickly find a document. Make sure the file name makes sense and includes the most important information regarding what the document is or says.

5. Integrate paper and electronic documents.

If you have essential paper-based documents that must be retained permanently, create a dedicated place within your filing system for those documents. Consider making electronic copies of the paper originals. Or, if you must keep the physical paper documents, store them in a secure location in your office in accordance with the structure of the digital system.

6. Create a plan for file backup and data recovery.

Chances are you’ll regularly update many of your files. Establishing a plan for frequently backing up your files ensures that the most recent version is always available. A data recovery plan is also a must in case files are accidentally deleted or, worse yet, altered or removed amid a data breach.

“File backup and [a] recovery plan should be enforced to avoid any chances of data loss and also ensure that business processes run smoothly,” Schneider said.

7. Train your team on how the filing system works.

Once your initial filing is complete, make sure your entire organization understands how the system works and how documents must be named, filed and stored going forward. Create a resource document that outlines all of your filing guidelines. Keep it in your files, and include training on your filing process as part of your onboarding process with new hires.

What are the differences between traditional and computerized filing systems?

Traditional filing systems are generally paper-based and manually organized. Computerized systems, though, are digital, with documents organized and stored via a computer, as the name suggests.

Traditional filing systems tend to take up a lot of physical space — all of those papers require boxes or filing cabinets for storage. Plus, these systems are susceptible to physical damage from fading, fire, flooding and other issues. Transitioning to a paperless office is a more secure way to conduct business.

“If your paper filing system is within a facility that has experienced a physical disaster, those documents are likely lost forever,” Terronez said. “With a computerized filing system, you can make backups of all of your data and store it in different locations or data centers.”

Furthermore, electronic filing systems are generally more budget-friendly. They free up physical space and offer many benefits that help you organize your documents and share them across your company with ease. Switching from a traditional to a computerized filing system can greatly increase your system’s functionality by automating many aspects of the process, such as indexing and tracking.

What are the benefits of a computerized filing system?

Here are seven ways implementing a computerized filing system can help your business manage documents more efficiently.

Automatic indexing

You can configure automatic filing systems to register, categorize and organize files based on specific criteria that you customize, such as file function or size. This functionality makes it a breeze to store documents in an orderly fashion and retrieve them just as quickly. Our review of M-Files, a document management software provider, dives into how helpful such workflow automation features are for your business.

Security

A computerized filing system provides security safeguards such as managed access control, audit trails, automatic backups and password protection. If a disaster strikes, like a fire or flood, your files are stored safely in the cloud — away from physical harm.

Regulatory compliance support

If you operate in a regulated industry such as health care, electronic filing offers regulatory compliance support for HIPAA, Sarbanes-Oxley, Good Manufacturing Practices by the FDA and ISO 9000/9001. This capability provides your business with invaluable protection and peace of mind as you process critical or sensitive documents.

Scalability

A major benefit of computerized filing vs. traditional filing is the ability to scale, or grow, the system alongside your business. When purchasing document management software, for example, you can start with a small amount of digital storage space and then progress to higher service tiers as needed, adding more space and tools to your system as your document collection expands. Scaling is much more difficult with physical filing systems that take up valuable floor space, which will require even more room as you add files.

Collaboration

An electronic filing system makes sharing and collaborating on documents simple. Tools like live editing, file sharing, plugin integrations and access restriction make teamwork much easier. These systems are also helpful for obtaining e-signatures from clients.

Integrations

Does your business use one of the best CRMs or an ERP database? Then computerized filing software that integrates with those programs will make your everyday business operations much easier. By connecting your platforms, you can increase workflow efficiencies. Many document management systems also integrate with email programs like Microsoft Outlook. [Learn about Microsoft’s document management solutions.]

Quick document retrieval

Searching for the right document when you have an entire business’s worth to go through can be a nightmare. It can even cost you money. But with the proper indexing procedures in place via your computerized system, finding a document takes mere seconds. Plus, employees can remotely access the documents they need from any location.

David Chen, director of finance for Taizhou Srlon Food Container Technology Co., described the efficiency gains his company experienced in the years after he led its shift from traditional to computerized filing systems. “The benefits are multifold, from considerably reducing storage space to enhancing document retrieval efficiency,” Chen said. “Our company has experienced a 30 percent reduction in time spent on file management since our shift.”

Alex Lirette, founder of Orbital SEO, an SEO agency, did this for one of his clients and saw similar results. “We transitioned a client’s paper-heavy workflow to a secure, cloud-based filing system, reducing document retrieval time by over 40 percent,” he said.

>>Read next: Why small businesses need to digitize documents

How should you name files on your computerized filing system?

Naming your files effectively is one of the most critical aspects of an efficient computerized filing system. Without a consistent file-naming convention in place, finding documents can be difficult and frustrating. If you start with good habits when first implementing your system, you’ll set your business up for long-term success.

To begin, understand that there are two types of files you’ll be storing: the ones you create and the ones you collect. Create a system that differentiates these two file types in a way that makes sense — whether that’s marking it in the file name or dictating where the file is stored.

Next, decide on a naming convention. The best styles usually include dates and version numbers while avoiding special characters. An example could be “Employee Handbook 2024 Version 1″ or “Employee Handbook February 10 2024.” You should aim to be descriptive and specific so files are easy to find according to how old they are and their subject matter.

Above all else, be consistent with file naming throughout your organization. Conventions that work best vary from business to business. But, it would be challenging if different departments used different naming conventions. Try to use one style across your entire business so everyone and everything is in sync.

A digital file cabinet for the whole business

Imagine an office with no filing cabinets. You and your team would have more legroom underneath your desks, and your hallways would become wider without all that furniture crowding them. Computerized filing systems have been bringing this reality into existence for years. So, if you’re not already using one, now’s the time to build out your system. After reading this guide, you have everything you need to get started.

Max Freedman contributed to this article.