Benefits of using document management software
Following are a few key benefits of using document management software:
Save time by automating document filing and organization
Using a standard file management system that comes built into your computer, you cannot differentiate documents other than from their names, folders, and extension (e.g., .DOC, .PDF, .XLS, etc.) This is helpful only if you don’t use a lot of documents, as, in that case, you can easily classify and find any document without much searching. But what would you do if you accumulate hundreds or even thousands of documents in the .DOC format alone? How will you differentiate two .DOC documents that are used for different purposes? In such cases, classifying documents using just file names and folders can become a real hassle and a time-consuming affair.
To highlight the benefit of using a document management tool in terms of time saved, let’s consider an example. Say you accumulate hundreds of contracts, invoices, and receipts for the services you provide every quarter. This means that, in order to classify your documents for audits or simple accounting purposes, you must have all your documents arranged in a system that makes it easy to find and retrieve any single document. To create such a system, you have two options:
Method 1: Use lengthy file names or complicated folder structures
The first method is to rely only on the file names or folder structures to organize documents. Whenever a new document needs to be saved, all you have to do is make the filename as detailed as possible. Sounds simple, right? Well, not really. You have to first establish a standard way to name your documents. For instance, you may decide to use a format such as “Document type – Client name – Year – Month.DOC”. Thus, if you want to save a contract document for a client named XYZ for the month of March 2019, you must name the document as “Contract – XYZ – 2019 – March.DOC” While the procedure may seem simple at first, doing so for hundreds and eventually, thousands of documents can make it an inefficient process. That’s because a considerable amount of man-hours will be spent on saving these documents using manual data entry.
Alternatively, you can classify the documents by creating a standard folder structure to arrange the documents based on different factors. However, using folders can bring with it another set of complications. For instance, you can create a main folder named 2019 containing a folder for every month. Each monthly subfolder can contain a subfolder for each client, and each client subfolder can have multiple subfolders, each for a document type (i.e., Contract, Invoice, and Receipt.) To save documents in such a folder structure, employees will have to spend multiple hours every month to file each document in its designated location by clicking through complex directory paths. This process can take several minutes for a single document, which can again compound to hours per month or quarter.
Method 2: Use a document management software
Expedite business processes by improving file searchability
A major problem faced by businesses that keep expanding is that all their documents and information are scattered across different folders, device, cloud storage services, and even different locations if they have multiple branches. This means that there is no single source of information that all employees and other stakeholders can rely on. This, in the long run, leads to numerous problems and inefficiencies. For instance, having all your documents scattered across different places means it becomes hard to find a specific document when needed. If the document is needed for something important, like an audit by financial regulators, the cost of not finding that document can be huge. Thus, it is advisable to have all your documents stored in a single searchable repository. And a document management system provides you with just that.
A document management system can ensure that all the documents you have in your organization are well accounted for. While such software may not provide you with storage space such as a cloud storage service does, they can help you effectively manage all your documents stored on one or even multiple different storage systems. And this ability to unify the document collection from different places is what makes document management tools valuable.
For instance, you can have multiple computers in your organization that are used by your employees to generate and save work-related documents. You may also use a dedicated cloud storage service to store all your key documents in an easily accessible manner. Additionally, you may have business applications that are only compatible with specific cloud storage services, forcing you to use more than one cloud drives. Now, having these many different and disconnected sources of documents and information can become hard to manage with time as the number of documents continues to grow. Even documents that are related to a single operation can be scattered across multiple hard drives and could drives, making it hard to use these documents to get things done.
Collaborate easily through instant and secure document sharing
In addition to being able to store all the documents in one location, it is necessary for businesses to be able to share the documents and the information contained within them with the right people at the right time. However, it is important to keep in mind that while delivering the requisite information to the right people, it is crucial to prevent sensitive information from going to the wrong people. These businesses need to have a system that allows seamless sharing with selective security of documents. And there is no better tool to achieve that than a document management system.
A document management system enables businesses to share documents with different members of an organization in multiple ways. The simplest way is by just using the ‘share’ option that allows users to share a document with one or more other users with a single click. Users can also restrict the recipients’ access privileges while sharing documents. This can prevent the recipients from editing and printing documents and only allow them to view them.
Streamline your business processes by enhancing your enterprise applications
For instance, say you use an ERP system’s Human Resources Management (HRM) module to manage your employees’ personal information. You can use a document management system to integrate with the HRM module for automatically filing the employees’ monthly or weekly payslips, their leave applications, their employment contracts, personal documents, and other related documents in a well-organized, easily accessible yet secure document repository. You can even create an employee portal through which your employees can access these documents after going through a log-in procedure. This will ensure that the HR department does not have to deal with frequent requests like issuing duplicate payslip copies, keeping track of leaves, and updating employee information.