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Document management is an organizational method. More specifically, it is a technology-based means of storing documents. Documents (and sometimes images) are held in a single repository that simplifies managing and retrieving the files when necessary. Since organizations have diverse needs, systems are often custom designed.
Document management typically begins with using a scanner to convert paper documents into digitized images. Once all files are electronic, it is easier to organize the information.
In the next step, sometimes referred to as indexing, the scanned image is typically given a name containing the date. The user is often asked to type in additional "tags" or indexing criteria. For instance, if you were scanning a customer’s financial plan, you might tag it with the name of the customer, the words “financial plan” and the date. The system stores the scanned file by associating the image with the tags. Accurate tags make it easier to find the document you need.
Some document management systems also have a function called “optical character recognition” (OCR) built into the scanning process. As the document is scanned, the OCR software “reads” the page and stores the text as tags to facilitate future retrieval.
When you need to retrieve a document from the system, you perform a search by entering one of the tags. The request is processed and the information is retrieved.
Document management systems include security measures to ensure that only authorized users have access. These measures determine which documents certain people can read, and what actions or modifications they can make.
An effective document management system helps companies become better organized by making it easier to file, share, retrieve and secure information. Employees can also be more productive since they save time searching for business critical information. A good document management system also facilitates collaboration, decision and the ability to build upon the work of others.
Digital files have functionality that is not possible with paper files. With a document management system in place, multiple people, even those working from home offices or the field, can access and work on files simultaneously.
Improved customer service is another important byproduct. Files are at the fingertips of all employees so that customer inquiries can be answered more quickly and effectively. There may also be a savings in printing and copying expenses and less need for onsite and offsite file storage space.
CPAs are an excellent source of information on document management. Consult with a CPA to determine whether a document management system can help your company make quicker and better-informed business decisions and increase employee productivity.