Pursuit of Paperless Office Needs Good System

CHICAGO (TheStreet) -- For all the talk about going paperless, American offices are still awash in documents. We all know co-workers whose desks have disappeared under mountains of folders, magazines and receipts. It's easy to see how a disorganized office leads to an inefficient business.

But moving your data online doesn't always solve the problem. When files are saved haphazardly, in different drives and machines, electronic documentation can be just as chaotic as piles of paper.

That's why every business needs a document management system: a set of guidelines that determines what should be kept and where; what can be tossed into the recycling bin; and what should be shredded. While large corporations can hire consultants to handle such issues, small businesses often don't have well thought-out policies, and that can have very expensive repercussions.

"Almost all companies, big or small, are subject to company law, tax rules, employment regulations and health and safety regulations," says Doug Miles, director of market intelligence for the Association for Information and Image Management. Any documents that relate to tax payments or regulatory obligations fall into the "must keep" category.

Ideally, every company should set up a retention policy, so employees have clear guidelines of how to proceed. "Common sense must rule," Miles says. "Ask yourself, 'Am I likely to need this document if things were to go wrong with this order, contract, customer, employee, tax return or profit statement? Is this a piece of information or knowledge that could usefully be shared with others, or might be searched for at some time in the future?' Simple rules may be more important in a smaller business than a complex set of regulations and retention lists."

Having a clear retention policy can also help cover you in case of a lawsuit. If you're sued by a customer or supplier, a well-documented record of your exchanges with that person might make the difference in whether your win or lose the case.

However, not keeping certain documents can also pay off. "If you have legitimately deleted a record, and can prove that as part of your retention policy, it cannot be drawn into court," Miles says. "AIIM research indicates that in 75% of cases, records that could have been deleted have prejudiced rather than assisted a legal case." (Note, however, that if you can't provide justification for why certain records were destroyed, you can be assessed a hefty fine.)