How To Setup An Effective Office Filing System

different files arranged in a drawer

Published Aug. 28, 2022

An organized office filing system is crucial for any business that deals with records such as invoices and receipts. Even if your enterprise doesn’t generate lots of paperwork, it’s key to have an organized and efficient work environment as it’ll help keep your operations running smoothly.

Office filing systems come in various forms, ranging from simple file organizers to complex arrays of digital servers. 

To design a system that works for you, it’s essential to understand which files to put first, who needs access, and how they can be quickly and efficiently retrieved. In this guide, I’ll discuss each of the key factors you’ve got to consider when creating an office filing system template.

Reasons Why A Filing System Is Essential

Knowing how to maintain receipts and invoices properly is vital for a small business’s financial health. A non-existent or disorganized filing system can add days to income tax time, and you do not want to miss out on tax deductions due to missing receipts. 

In addition, if you are audited and cannot produce the required documents on time, your claims may be denied, and your tax return may be reassessed.

While most people do not consider the labor they will be able to save with the help of filing systems, some estimates indicate that businesses spend six weeks per year searching for misplaced files.

If your business is relatively simple, your record-keeping needs may be limited to payroll and accounting. However, you will still need to be able to work quickly and easily at your desk.

a hand picking a file from the records

Five Ways To Organize A Filing System

To get you and your business flow smoothly, as well as for stress management, follow these five steps to ensure that documents are easily accessible and identifiable:

1. Recognize Personal And Office Habits

Consider which employees require access to files, their work locations, and what makes sense for their workstations. Aside from that, determine how much office filing space you have.

If you’re designing a system for yourself, consider ergonomics, your workday flow, your office space movement, what you can reach effortlessly from your desk, and what info requires frequent access versus what can be archived in the long term without being touched. 

On the other hand, if you’re designing a system for another person, solicit audience insight because what works for one person may not work for another. This is especially true if you aren’t aware of the personal habits of the person you’re creating an office filing system for.

2. Choose an Effective Filing System For You

The nature of your business will dictate whether you need to file numerically, alphabetically, or in some other manner. Keep in mind that what works for some may not work for others.

For instance, do you conduct searches by name or account number or do you organize your paperwork according to categories such as expenses, income, and whatnot?

While space is not an issue with digital systems, it’s essential to have room for growth when purchasing filing cabinets when it comes to paper systems. 

It is recommended to buy something that can hold twice the number of files that you currently have. After all, lots of storage allows for the easy filing of documents as your business grows.

  • Color Coding

People have been using color coding since office paperwork, and that was decades ago. Color coding is a tried and tested technique that never fails. Also, it’s relatively quick and simple to implement, even for business owners who have got a particularly complicated filing system. 

Color coding will motivate you to organize your files into sensible categories, locate them quickly, and enjoy the filing process.

This organizational technique is ideal for transforming disorganized stacks of paper into orderly packages that are as predictable as possible. Best of all, color coding is compatible with both physical and digital files, so you can easily use the same color coding system if you need to organize both types of files. If anything, this is excellent news from an efficiency standpoint.

  • Digitizing

When files are digitized, a paperless filing system for the office is created. 

Converting all paper files to digital formats is better as many people find organizing a digital filing system easier than a paper filing system. If you like to digitize your files, you must first scan and convert your existing files, which can be a rather time and labor-intensive process.

  • Set Expiration Dates

While this may appear to be a shortcut, one of the most effective ways to organize an office filing system is to minimize the number of files to organize. 

Weeding out files by content can be challenging because it’s difficult to determine which files should be saved and which should be thrown out, but discarding files by age provides a safe and standardized method to declutter your office filing system.

3. Calculate Your Storage Needs

If you have a lot of files that need access regularly, they should be easily accessible. Those accessed infrequently do not need to be located in your workspace but may need to be nearby. There could be a combination of factors. Certain files may be required daily, while others can be filed away for long-term storage.

4. Have A Good Labeling System

While the ability to read file labels may seem obvious, clarity in labeling will save time. 

The majority of companies that manufacture labels also have office filing system templates that are compatible with common word processing software. 

We recommend trying one of those small label-making systems that can also print individual mailing labels. Remember, items that serve multiple purposes are always a wise investment.

5. Utilize Hanging Files

Folders that are both user-friendly and durable are an excellent investment. 

Hanging filing folders in bright colors are readily available and easily identifiable. For instance, if you organize all client files in pink hanging folders, marketing in green folders, and financial info in orange folders, you will save time searching for and filing documents using easily identifiable visual cues.

Try to Go Paperless

Numerous businesses have already made the transition to a paperless office or something close to it. With online, cloud-based storage and digital transactions replacing cash transactions may make paperless the new normal.

Even government agencies have joined the cause. The IRS now accepts scanned images or paper copies of scanned items, including the following:

  • Receipts in cash
  • Account statements
  • Checks that have been canceled
  • Salary stubs
  • Statements from credit cards

If you are still operating traditionally but wish to go environmentally friendly, you can gradually transition to paperless operations. Fortunately, numerous services and software applications scan and store old expense receipts alongside your other digital accounting information in a safe way through the utilization of advanced data encryption technologies such as AES-256.

The Bottom Line

Setting up an effective office filing system is paramount to the growth of your enterprise. 

When you do this, you’ll be streamlining operations, making it way easier for you and your employees to access documents. Therefore, it’s crucial that you create a filing system that works for you as soon as possible.

(Related: Productivity Affirmations to Start your Day Right)

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How To Setup An Effective Office Filing System

About The Author

is an experienced blogger with a deep passion for content creation. He descends from a long line of lawyers, writers, and educators. Over the years, Chris has tackled all sorts of niches for a myriad of clients. As a result, millions of people worldwide have read and benefited from his content.