I often talk to people about how to effectively organize digital files. Most of them understand that better organization means they can find their information faster. Obviously, that’s true. But there are other reasons to have a carefully planned folder structure and better file names. It is all part of an intentional records and information management (RIM) policy that will help ensure the right people have the correct information at the right time.
Structure vs Search
A planned folder structure is essential to organize digital files effectively. It doesn’t matter if you’re using the hard drive on your computer or a cloud drive (e.g., Google Drive, Dropbox, etc.). The important thing is to develop your system to reflect how you manage your business and work with your files.
Some people believe using the search function is faster and easier than building a folder structure. However, search results often generate a list based on approximate results. Users must sift through the items to find the file they need. Searching might be adequate if you are the only one creating and using your files, but if you want to build your business, you need to create a system that will work with you and a team.
For example, imagine your employer asked you to find “information about Bob’s project” from last month’s meeting notes. What would you search for? You could search by date, but if the file wasn’t created until the following month, you might not find it. Searching for “Bob’s project” might list every file that mentions Bob, and you couldn’t narrow it down unless you knew more details about Bob’s project. It would be like trying to find a needle in a haystack – and a massive waste of your time.
But searching within folders significantly narrows the search results allowing you to find what you need much faster. Let’s look at how to build a folder structure to organize digital files effectively.
Top-Level Folders Mirror Corporate Structure
Generally, I suggest small business owners imagine they are the CEO of a giant corporation with a board of directors. Then, create their top-level digital folder structure to mirror the director portfolios. These are the typical top-level folders:
- Human Resources
- Research & Development
* I’ve listed these alphabetically because that is the default on most computer systems. However, business owners could preface the folder names with a number so they appear in any order (e.g., 1-Finance, 2-Marketing, etc.).
There are two main reasons to use this arrangement. Firstly, this classification is common throughout most industries. Anyone (from team members to auditors) looking through your business records could quickly find what they need. Secondly, it helps with protecting your business records. You can share specific folders with team members, so they have the information they need but cannot access other information.
For example, if you hire an accountant, you can share your Finance folder on a cloud drive. They can access your financial records – but not your Operations records. This saves you from moving or copying documents to a different folder or (heaven forbid) sending them via email.
Using Subfolders to Better Organize Digital Files
Let’s look at the contents of each top-level folder and review some common subfolders. There may be variations in how you manage your business.
The administration folder would contain records about owning and managing the business’s infrastructure. Subfolders might include:
- Legal: original contracts, articles of incorporation, business licence, trademarks, patents, copyrights, etc.
- Insurance: insurance policies, claims, etc.
- Policies: company policy manual and previous policy records
- Infrastructure: asset ownership records, guarantees, etc. Note: Those in service-based businesses often include computer care and maintenance in this section.
- Brand Assets: original copies of logos, designs, images, etc.
These are all the financial records for your business. Ideally, create a separate folder for each year. Then, within each year, work with your accountant or bookkeeper to create folders for your business. Examples are:
- Income/Accounts Receivable
- Expenses/Accounts Payable
You may be a one-person business, but you’re still human and could consider yourself your own employee. And maybe someday you’ll hire employees or sub-contractors, so it’s best to be prepared. Some subfolders include:
- Job Descriptions: for current and previous positions, including your many jobs as a business owner
- Recruiting: recruiting ads and timelines, applicant information, etc.
- Employee Records: application, résumés (including yours), performance evaluations, training & education, termination records, etc.
- Occupational Health & Safety: as required by your industry and jurisdiction
- Training: past and present course materials, conference/seminar notes, etc.
This folder includes all your sales and marketing information, media coverage, and networking you do, as well as text and images used in:
- Website and blog posts
- Social Media
- Advertisements and other marketing collateral
The operations folder is where you organize digital files related to your products and services. You can put your client files here if you have a service-based business (interior designer, coach, etc.). Operations subfolders can include:
- Standard Operating Procedures (SOPs): work instructions explaining how to perform the tasks related to creating your products and executing your services.
- Production Records: documentation associated with creating a product or batch of products, including ingredients and their origin, production and storage parameters, packaging and shipping details, etc.
- Client Files: reports, images, meeting notes, etc. However, if you share your client files with team members, you should store your client estimates, agreements, and contracts in your Administration folder.
- Presentations: If you give presentations are part of your business model, I suggest including your presentation files in your Operations folder. This way, you treat each presentation as a “client” and perform quality control standards, so you continuously improve.
- Quality Control: records indicating you review, inspect, and test your product so it meets a specific standard. Include records documenting any action you take to correct a product or process and how you will prevent it in the future (corrective action/preventative action, CAPA). If you have a service-based business, include client and employee feedback after completing a job and documentation regarding customer complaints and how you resolve them.
Research & Development
Whether creating a presentation on a new topic, investigating a better gadget for making widgets, or considering a new office chair, use the R&D folder to organize these digital files. Ideally, you should These subfolders might include:
- Projects: have a separate folder for each new product, service, or presentation. And it might be a good idea to include the date in the folder name to see how old it is (e.g., mega-widget-202103).
- Continuous Improvement: store ideas, concepts, plans, etc., to improve your products, services, business administration and management.
- Competitor and Industry Research: always keep an eye on what is happening in your industry and what your competitors are up to.
Flexible Yet Consistent
Of course, your folder structure may vary depending on your business. You might have Quality Control or Health and Safety as top-level folders. If you’re a sole proprietor, you might keep your business financial records with your personal documents to facilitate processing your income taxes. And while flexibility is important, so is year-over-year consistency.
Set aside an hour or two and create a folder structure to organize digital files. It will help your business save time and money and allow you to scale smoothly and efficiently. If organizing digital files seems overwhelming, feel free to reach out and book a meeting. I’d be happy to help.
3 thoughts on “How to Effectively Organize Digital Files for Your Small Business”
Awesome Jacki! We’re working through file structure in OpMo right now. Developing a naming convention….yuck.
Good luck! Let me know if you need anything. I’m always happy to provide some assistance to my fave non-profit!
This article provides valuable insight on the importance of organizing digital files for businesses. The suggested folder structure is practical and flexible, ensuring faster access to relevant information while boosting security measures. Great article with great tips!