CAN’T FIND YOUR FILES: Develop a Digital File Storage Structure

ARI is a cloud-based Trusted Advisor providing start-up, accounting, payroll, and tax services to small businesses.?We’ve been “in the cloud” for over a decade, and work with clients remotely.

Years ago, while working with clients, we discovered our clients’ digital/online files were unmanageable.?When we requested information from clients, they had difficulty finding the information.

Granted, I’m an accountant, and the butt of all jokes about anal retentive or compulsive behavior.?When I come home, my hat, keys, and wallet are placed on a shelf by the front door – ready for me when I leave home.?I always know where they are.?Everything has a place, and everything in its place.

When ARI was established, we developed a digital file storage structure.?For us it was a straightforward process.?We just looked at our physical file storage system and replicated it in the cloud.

In the physical world, companies store their files (in descending order):

1.??????A file storage room

2.??????A filing cabinet

3.??????A filing cabinet drawer

4.??????A hanging file (those green things)

5.??????A manila folder

6.??????A file

For example, imagine a four-drawer filing cabinet in a storage room.?Only certain employees have access to the storage room.?The file cabinet drawers are labelled: Admin, Customers, Vendors, and Employees.

The Admin drawer contains permanent, organizational, and sensitive files.?These would include incorporation files, registration files, and shareholder information.

The Customers drawer contains former and current customer information, invoices, contracts, and related documents.

The Vendors drawer contains former and current vendor information, invoices, contracts, and related documents.

The Employees drawer contains former and current employee information, applications, payroll forms, and reviews.

For those of you who remember, or still work in the physical world, the storage room also included blank forms to be used for new customers, vendors, and employees.

In a digital world, the file storage structure is identical to the physical world, except the “storage room” is an online storage account with limited access.?The filing cabinet “drawers” are merely a series of “folders” and “subfolders”.

So, moving from physical to digital should be a snap.?But for many businesses something got lost in the translation.?Have your ever seen someone else’s digital storage structure??I have, and it looks like they opened the storage room door, threw a file in, and closed the door.?It’s understandable why they can’t find anything.

By now, based on my description of a physical world file storage structure, you’re well on your way to cleaning up your digital world file storage structure.?But just in case you’re missing the point, here’s a graphic that shows how your digital file storage should be structured:

In the graphic above, I’d like to point out a couple of elements that take advantage of the differences between physical storage and digital storage.

First, you’ll notice several folder names begin with the “!” character.?Naming a folder in this manner exploits the sorting order followed by computers.?When a computer sorts a list, non-alphanumeric characters come first, then numeric characters, and then finally alphabetic characters.?This means that if you have hundreds of active customers, vendors, or employees, your “!Former…” and “!New…” folders are always at the top, requiring less scrolling to access them.

Second, you’ll notice that the customer, vendor, and employee folders include a folder named “!New…”.?These “!New…” folders contain the subfolders and forms required for a new customer, vendor, and employee.?Essentially, this is the digital world equivalent of the blank forms library used in a physical world. ?So, for example, if you are setting up a new employee, copy and paste the “!New Employee” folder and rename it with the new employee’s name.?The newly created employee folder now contains a “Payroll Forms” subfolder containing a blank W-4 form, and direct deposit agreement form and the “HR Forms” subfolder contains a blank job application form, I-9 form, and performance review form.?This ensures your employee folders ALL contain the same subfolders (consistent storage structure) and ensure that new employee folders contain ALL required forms (consistent employee onboarding).

TIP: Place a blank W-9 form in your “!New Vendor” folder, and blank credit application, contact, and direct draft agreement forms in your “!New Customer” folder.

With a digital file storage system, maintenance is simple.?When a customer, vendor, or employee is no longer active, just “drag and drop” the folder to the “!Former…” folder.?If a former customer, vendor or employee becomes “active” again, just “drag and drop” the folder from the “!Former…” folder.

Give this digital file storage structure a try, you’ll spend less time finding information.?If you have some tips for me, let me know by leaving a comment.

Stay tuned for next month’s management article.?I’ll be discussing a digital file naming system designed to organize the files in your folders, and provide you with insight to the contents of the file without having to open it.

If you are looking for a Trusted Advisor who works with you on more than just your accounting, payroll, and tax needs, contact ARI today.