‍

It is not an exaggeration to say that every successful business has some sort of document management system, chiefly because anybody who lacks one rarely has a successful business. Losing track of your data ends in annoyance at best and catastrophe at worst, with the coup de grace delivered by better-organised rivals or local law enforcement depending on the scale of the problem.

At its simplest, a document management system (or DMS) is a way to keep track of your various documents and valuable data, from the company registration to the live customer accounts and invoices. It’s effectively a virtual filing cabinet, but with assorted benefits of the digital age - search is the most obvious, but the best document management systems include things like automatic tagging and updating, deep integration with email and customer databases, and customer-facing features like electronic document signing. 

The level of complexity scales depending on the business and the amount of information you need to retain, plus of course the budget you have available. For very small businesses, it’s worth considering the benefits of a simple document sharing app vs a full document management system - but if you’ve got to the point where you can never find the document or data you need, and it’s starting to hurt your customers, it’s time to go DMS shopping. 

This article will explain how document management systems work, the type of features they offer, and the sort of thing you need to consider when looking for a DMS. If you want a bit more detail about a specific industry, check out our guide to the best content management systems for different businesses, which includes specific insights for accountants, financial advisors and construction professionals.

‍

How does a document management system work?

The simplest view of a DMS is as a virtual filing cabinet: it allows you to store, search, and retrieve documents in an organised and efficient way. Unlike a filing cabinet, it can do a lot of actual filing work for you,and integrate deeply into the other tools you have in the office. It’s here that the greatest efficiency savings can be found. Here’s a rundown of the features that most DMSs offer as standard.

1. Capture and indexing: Documents are uploaded into the DMS, where they are either scanned (for paper documents) or directly uploaded in digital formats like PDFs, Word documents, or spreadsheets. Once uploaded, each document is assigned metadata information like document type, author, date, and keywords, which can be assigned from the source file or by the DMS itself. Adding this data makes the document easier to find later on, because you don’t have to know the title or even the content - just the topic.
   
   
2. Storage and organisation: Documents are filed under a centralised system, usually based on categories such as project name, document type, or department. This helps users easily navigate and locate files, eliminating the need for time-consuming manual searches. Project- and client-based organisation can be a real game-changer, here. If you use a DMS which can automatically tag and organise files by client, then you’re always able to find that client’s information even mid-meeting.
   
   
3. Security: One of the most important features of a DMS is its ability to control who can access specific documents. You can set permissions to ensure that sensitive files are only accessible to authorized staff members. This has long been a requirement for businesses with strict legal requirements, like CPAs and finance firms, but it’s increasingly a concern for all businesses given the rise of ransomware and data theft.
   
   
4. Version control: In many organisations documents are constantly updated, and keeping track of changes can be challenging. A DMS offers version control, allowing users to track revisions and view the lifespan of a document and the changes that have been made to it. This ensures that everyone is working with the most current version, helps prevent errors caused by outdated information and tracks who made each change.
   
   
5. Collaboration and workflow management: Many document management systems come with tools to enable collaboration among team members. Most of them have the ability for users to leave comments, share documents, or approve/reject changes, either within the platform or appending to the files themselves. Some DMSs also offer workflow automation tools, which help streamline business processes like document review, approval, or contract signing.
   ‍

‍

Why your business needs a document management system

1. It boosts efficiency and productivity: Yes, every piece of software promises this - but a DMS is the most likely to achieve it, bar none. By moving away from paper-based systems, businesses can speed up document retrieval, reduce physical storage costs, and improve workflow efficiency. A bog-standard online platform like Google Docs just gives you online storage and collaboration, but a proper DMS backs that up with proper record-keeping, tracking and monitoring so you aren’t simply recreating a stack of unfiled paperwork with a digital equivalent.
   
   
2. It’s safer: A traditional filing cabinet does not meaningfully protect your documents from theft, loss, or unauthorised access. (It’s admittedly better protected from overseas hacking collectives because nobody’s getting on a plane from Macedonia to jemmy open your office, but the efficiency hit is not really worth the trade). A credible and consistently-supported DMS offers enhanced security features such as encryption, access control, and audit trails, ensuring your documents are protected from threats.
   
   
3. It’s legally compliant by default: Many industries are subject to regulations that require strict document retention policies. A DMS helps organisations comply with these regulations by automatically organising and storing documents for the required retention periods. It can provide an audit trail to demonstrate compliance during inspections or audits - something that’s increasingly required of all businesses operating in the UK thanks to the requirements of the recent ECCT act.
   
   
4. It’s cheaper: Paper-based systems are not only inefficient, but they also come with hidden costs, such as printing, storage, and filing supplies. By digitising documents, companies can save on physical storage space, reduce printing costs, and improve overall resource management.
   
   
5. It’s environmentally friendly: With growing concerns about the environment, many businesses are looking for ways to go paperless. Adopting a DMS can significantly reduce your company’s paper consumption, contributing to a more sustainable business model.

‍

Key features to look for when considering a document management system

The right type of document management system depends on the business. Tightly-regulated administrative businesses like accountants and financial advisors have firm legal requirements on their document management; other organisations have more flexibility but invariably it’s company size and complexity that makes the difference. You can find more detail in our guide to the best document management system for different businesses, but these are the main things to look for:

• Automatic tagging. Digital storage is foundationally superior to paper just with a bog-standard Google-style search function, but for superior results you’ll need detailed tagging and filing. This can be just as much work on digital as it is for paper, but the more advanced DMSs include automatic tagging, increasingly powered by AI, which can do the bulk of the work for you.
• Cloud-based storage and access: This is the bare minimum for any DMS and serves two purposes: remote access, ensuring that your documents are available wherever you (or your team) are, and automatic backups, reducing the risk of data loss.
  
  
• Native mobile support: Mobile-friendly DMS platforms enable employees to access and manage documents from their smartphones or tablets. That might not be a regular occurence, particularly for accountancy firms, but it’s an invaluable feature for the times when you do need to find the right information when you’re on the move. 
  
  
• Advanced search functionality: The ability to search for documents quickly is essential. Look for a DMS with powerful search tools, including full-text search, to help you locate documents faster.
  
  
• Integration with other software: Many businesses use multiple software systems for tasks like accounting, customer management, and project management. A DMS that integrates well with these systems can further streamline your workflow - and it’s also much easier to drive engagement with existing staff, because you aren’t forcing them to adopt an entirely new workflow. If you’re already running your business using NetSuite, Office365 or Salesforce, a DMS like Workiro will plug right into them.
  
  
• Legal compliance: if your business or industry is subject to specific legal requirements, then look for a DMS that’s specifically tailored to support them. Some platforms will support standardised workflows for things like auditing straight out of the box.
  
  
• Ongoing fees: any good DMS will be a paid subscription platform, so it will come with monthly fees - but check to see if there are additional costs on top of the main platform charge. Things like cloud storage surcharges can add up, and having to monitor your cloud storage footprint is an extra problem rather than a solution.
  ‍

‍

Picking the right document management system for your business

There are a variety of different DMS platforms on the market, so you can pick the one that’s best suited to your business’s size, complexity and sector. Workiro is a particularly good choice for low-effort integration, because it works directly with Office365 and NetSuite to bring your data together. It also includes a rich suite of collaboration tools, including instant messaging and PDF markup, unlimited cloud storage and a fully-featured mobile app. You can find out more about Workiro, and compare it to other platforms in our guide to the best document management system for different businesses.