8 Easy Steps for Creating a Document Management System
Taylor Pettis February 3rd, 2021
Without a collection of historical and current documents, where would any business be? Documents are the manifestation of all the hard work you’ve put in to build your business and support its growth.
However, those documents are next to useless if you don’t have a good way to handle them. A robust document management strategy helps employees locate, access, and deliver important documents quickly and easily.
And while creating a document management system may seem overwhelming at first, there’s some good news. First, to say that the long-term benefits, saving time and money and avoiding stress and frustration, are worth it is an understatement. Second, it’s doable—and we can help.
In this article, you’ll get a step-by-step breakdown of how to create a document management system that works for you, your employees, and your clients.
What is a Document Management Strategy?
A document management strategy is any system used to digitally organize and track electronic and paper documents, such as project records, deliverables, invoices, receipts, agreements, certificates, charters, bonds, and contracts. A well-designed system lays out how a business handles documents to ensure easy creation, sharing, security, organization, tracking, transmission, and storage.
Crucial for facilitating a seamless flow of information within an organization, a document management system provides an array of benefits: increasing workflow efficiencies—which, in turn, saves money—protecting confidential client and intellectual data, ensuring compliance and risk reduction, and more.
Let’s take a closer look at how to develop an effective document management strategy for your business.
How Do You Write a Document Management Plan?
If you don’t already have a document management plan or are looking to improve the one you already have, here are some steps you can take to start getting things in order.
1. Set up a Team
Before you even start wading into the steps necessary to improve or establish a solid document management system, you’ll need to create a team of colleagues who can handle this project.
Even at small companies, it can be a challenge to wrap your arms around all of the documentation—and the processes associated with those files—that your business has. Forming a team to spearhead the undertaking not only ensures enough people are on the case, but it creates accountability to make sure the project gets done.
2. Examine Your Current Process
Once your team is in place, looking at your current documentation process will give you a good idea of the direction you need to take when developing your new document management system.
Take a hospital, for example. The high volume and variety of documentation a hospital handles is huge. And patients, hospital staff, vendors, and board members rely on having efficient, confidential, easy, and secure access to records. However, each of these parties uses their relevant documents in different ways. Accounts payable, for instance, needs to deal with documentation from external vendors, while HR handles documents that team members need to send out to and receive from employees and managers.
An effective examination of your current process should explore existing document management elements for each department. Look closely at how documents are:
- Collected or received
- Managed, whether approved, rejected, or pending
- Deleted, transferred, or otherwise disposed of
Looking at these document touchpoints will help you get a sense of where things are running smoothly and where you might need to make adjustments.
3. Determine Your Goals and Requirements
In order for your document management system to succeed, you need to determine your goals and requirements. It’s easier to take on such a project knowing what you want to achieve and why.
Maybe your organization has had unfortunate issues with document management in the past, and you want to prevent that from happening again. Or perhaps you want to free up some time for your team to spend on more important tasks. You could also be looking to improve your vendor payment times to get early payment discounts. Whatever your reasoning, knowing what end results you want will help you define the specific steps you need to get there.
4. Create an Inventory of Your Current Documents
Just as you need to take stock of your document processes, you need to also establish what sorts of documents support your organization. Take a deep dive into all the documents in your system so you can understand whose responsibility they are and how you might potentially categorize them within your system.
In our hospital example from earlier, some of those documents might include:
- Vendor invoices managed by accounts payable
- Patient bills managed by accounts receivable
- Insurance claims handled by billing
- Employee W-4 forms and pay stubs handled by HR
Regardless of your industry and what sorts of documents your business handles, it’s important to look at key departments like these to see what sorts of files they handle regularly.
To help focus your efforts, start by:
- Assessing your current system, recording how much paper and digital documentation you have. See if there might be opportunities to reduce your paper documentation.
- Developing a list of documents—such as business reports, invoices, contracts, job applications, and W-4s—for all areas or departments in your company.
- Selecting one or two departments to evaluate their document procedures and determine how effective or ineffective it is.
5. Get Rid of Unnecessary Documents
Next, it’s time to streamline documentation and eliminate documents you no longer need.
Work with your team to create a list of documents you use regularly and those that haven’t had any activity in a set time. (This time depends on what’s appropriate and the context in which a department should be using that document—it could be a month, a quarter, a year, etc.) For these documents that haven’t been used in a while, poll relevant department members to see why that is, if there’s a way to improve the form, or if the form has simply become irrelevant or redundant. These answers will help you streamline documentation in the future.
Also look for opportunities to downsize the actual files you have on site and in any digital storage; old files don’t just eat up space, they could present legal liabilities, too, depending on your industry.
For paper documents, determine whether and how you can digitize them for future reference. And when purging any documents—digital or physical—refer to your retention and destruction policies to ensure you follow proper procedures. There may be industry regulations that dictate how you should handle this.
6. Draft Your Strategy
Now that everything’s in place, it’s time to start drafting a strategy to help you quickly and effectively achieve your document management goals.
Here are some points help guide you as you develop a plan that works for your business:
- Think back to issues and problems you’ve had in the past with document management, such as outdated and duplicate documents, you want to eliminate. Are there processes or workflows that you can streamline or automate to prevent human error from negatively affecting your business?
- Design a standard for document categorization, labeling, processing, review, storing, retrieval, security, transmission, and deletion. Train everyone in the organization on these standards to ensure compliance.
- Appoint authorized users and establish permissions to monitor access and ensure security of documents.
- Work with your IT team or cloud hosting service to make sure you have a data backup and recovery plan.
- Adhere to document management best practices, including maintaining the integrity of the original document and making sure the process makes your employees’ work easier.
7. Put It Into Action
Now that you’ve done all the leg work, it’s time to put your document management process into action.
You may want to start small, with a pilot program in one or two departments. Set a day and time to officially launch the pilot. In the lead up, clearly communicate the strategy to teams and provide training, so they know what to do and expect on the launch date. There will likely be hiccups or questions as people get acquainted with the new system.
If all goes well or once things are running smoothly for a while (that time frame will depend on what works for your business), determine a schedule for rolling the strategy out to the rest of your organization.
8. Manage It in the Long Term
Once you implement your document management plan, perform regular maintenance to keep things running smoothly. You don’t want to do all that work just to fall back into old habits. Task your document management team with performing regular audits and making updates to processes as needed, making sure they keep everyone in the organization in the loop.
Find a Document Management Software Solution for Your Team
By now, you’ve got all of the tips you need to develop a killer document management strategy to support your employees and clients alike. You’re well on your way to streamlining your business, saving time and money.
Of course, only you and your team can develop the strategy that best suits your organization. But one of the best ways to get there is to enlist the support of an enterprise document management solutions provider.
MHC Software offers turnkey solutions—like automated invoice processing, automated payroll document creation, and more—that save your organization time and money. Learn how MHC Software can help you today!
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