Small Business Document Management System – How to Begin Set Up        

If your business is getting buried under excessive mass of paperwork, it is time to transition into a digital small business document management system. Your business activities continue to generate documents daily and these create risks through the possibility of lost or misplaced files, security issues,  or a lack of accountability in tracking.

You have previously tried to manage your mountain of documents with in-house resources and purchased software, but this was not as easy as expected. Understandably so. Proper planning and deployment are necessary. Furthermore, there are best practices and rules that must be followed to bring a successful transition online

What are Categories of Business Documents?

Business documents are documents or records created and used or associated  with the execution of internal operations and external transactions. They are typically confidential and may be classified into 4 main groups

Foundational or Permanent Documents

These are business records that must be safely stored because they are foundational in nature. Common examples include the business plan, real estate documents, name registration, certificates of authority, bylaws etc.

Personnel Records

By law, businesses are required to retain employee files for a specified number of years to provide proof about their employees. These documents are helpful in the event of a complaint by an employee against the business. Employee documents usually include the following: recruitment records, contracts, benefits, WCB etc.

Financial Records

There are regulations that compel employers to retain various financial and tax records for a specific number of years. Examples include invoices and receipts, tax returns, payroll, bank statements, assets etc.

Legal Documents

Every business has different types of legal documents which include contracts with suppliers and contractors, licenses and permits, trademark, patent, and copyright agreements, insurance policies etc.

Small Business Document Management System
Poor Document Management

What is a Business Document Management System?

Creating and operating an efficient document management system is an essential business function.

Document management involves the managing the of how documents are created, shared, organized, and stored in an efficient manner. It uses a  cloud-based system to store, edit, retrieve, manage, send, and track electronic documents, from invoices to contracts to HR records. This process may involve the use of software or not.

A poor document management system – or none causes inefficiency, risk, and added costs from time spent looking for or re-creating lost or missing documents.

Document control drives quality through these key processes:

  • Document creation
  • Document Routing, Review and Approval
  • Integration with Employee Training
  • Document Change Requests

Objectives for a Small Business Document Management System

The objectives for having a document management system vary between different companies and are related to company size or complexity of operations. They include

  • The organization and storage of documents in a secure and structured way that make it easy to find documents.
  • Managing document creation with a focus on where templates for different business documents are located and how they should be used and controlled . In some cases, document creation involves collaboration, revision, or update of documents by several employees and these activities must be efficiently managed.
  • Restricting access to sensitive documents
  • Regulatory and business compliance
  • Security

For your business document management system to work effectively, it must also follow some best practices in its implementation. This is where a lot of businesses have challenges.

Potential Risks

All potential risks can be mitigated by having appropriate document controls in place. It is necessary that document control processes are carefully developed.  

Proper document control ensures that the correct version of a document is consistently used internally, or when sent to suppliers, stakeholders, and customers.

Access provision rights will differ for different employees based on whether they require access to sensitive or confidential documents. Wrong access rights given to an employee can create unnecessary exposure and legal liability for the business through malicious or accidental changes, deletions, or theft when the employee leaves the business.

Key Benefits of a Small Business Document Management System

Create Efficiency and Security

You can easily create efficiency and improve the security of documents.

Mitigate Risk and Reduce Costs

The DMS saves on costs for employee time spent looking for documents or having to re-create them when  misplaced or lost.  

Conclusion

A small business management system can be developed and implemented to improve and eliminate the bottlenecks experienced in any business from start-ups to growing or mature stages, and businesses that want to implement exit strategies.

Related Articles

Document Management and Digitization. Going Paperless

References

T. Schroeder (2019) How to create a document management system for small companies https://blog.softexpert.com/en/how-to-create-document-management-system-small-companies/

Troung, H (2021) Complete Guide to Managing Business Documents for Small Businesses https://anyconnector.com/en/business-documents.html

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