If you’ve researched “document management systems” on the Internet recently, you probably discovered that most people assume that phrase means only the process of scanning your documents, creating electronic files and managing those files on the computer. That simply is not the case.

While scanning and maintaining image files is one way to manage your company’s documents and paperwork, it’s not the only document management system available-nor is it even the best, most efficient, or most cost effective.

A document management system, in the truest and simplest definition of the term, is a system used to manage documents. Whatever form that system takes.

What most people do not know is that there are only 5 things they can do with a piece of paper:

(1) toss it

(2) stack it

(3) file it alphabetically

(4) scan it or

(5) index it

Remember the traditional alphabetical filing system that everyone thought was the only way to file for hundreds of years? It’s a simplified document management system.

Then came the numerical system, which never quite caught on in the general public, but did fit the bill for some companies. That, too, is a document management system.

And then office managers got smart and combined the two, which is very effective for doctors’ offices and such. Guess what it’s called? You got it. A document management system.

Whatever system you use to manage your files is a document management system by the most simplistic definition. Does that mean the way you manage your files is the most effective, most efficient or most cost effective method? Not necessarily.

If you go back to that search engine and research the most economical document management system, you may be surprised. One of the largest hidden costs many businesses face is the cost associated with managing the paper in their offices.

Anyone who has ever dealt with office filing realizes what a chore it is. You must not only decide how to file a document, but where, and then find a location in the proper sequence for the file. In addition, you must be able to quickly locate the file when it’s needed again. The labor costs alone can add up in a hurry.

For instance, let’s say it takes a $15 per hour employee five minutes to walk to the filing cabinet, search for and locate a needed file, retrieve the information required, replace the file, and return to her desk. If she must take the file with her to gather additional information, she will then need to return to the file cabinet and replace the file as well so the time may be longer, but five minutes is an easy figure to work with.

Assuming she handles a mere five files a day-and many employees handle many more!-that’s a total of over 108 hours every year that one employee spends filing. At $15 an hour, that costs the company over $1,600 a year-for filing! Double that to ten files per day, and those totals jump to 216 hours and $3,200… For one employee’s time filing! (And how many employees do you have?)

With a computerized indexed filing system, that employee could locate the needed file before ever leaving her desk, which would reduce her filing time considerably. Add to that the convenience of being able to place a file in the next open filing slot without the need to rearrange files, or squeeze in “just one more” folder, and you’ve got a much more efficient and cost effective document management system.

Such a filing system would also eliminate the costs associated with lost documents that must be recreated when they can’t be found. Some experts consider this can cost up to $250 per file!