A Document management system is crucial for businesses aiming to streamline their operations, save time, and facilitate compliance. In today's fast-paced business environment, the ability to handle and organize documents efficiently can be a game-changer. Without a document management system, businesses may find themselves overwhelmed by cluttered digital or physical storage spaces, leading to wasted time, increased costs, and potential compliance risks.

Document-related challenges can significantly impact productivity in the workplace. According to a white paper titled "Bridging the Information Worker Productivity Gap," these challenges result in a 21.3% productivity loss, equating to approximately $19,732 per information worker annually.

Only 26% of document and records management systems integrate with other core applications. When choosing the right document management software or DMS for your business, it’s important to prioritize one that accommodates underlying systems like Microsoft Office and email platforms.

Whether you're a small business or a large enterprise, an effective document classification system is essential for staying competitive in a data-driven world. Here are six critical steps to classify documents effectively, ensuring that your organization can operate smoothly and efficiently while meeting its compliance and operational goals.

1. Setup Tags & Keywords

The foundation of effective classification in document management software lies in meticulously defining tags and keywords. These serve as the building blocks for organizing and retrieving documents efficiently. Before initiating the document scanning and digitization process, businesses must clearly determine the criteria for categorization so that documents are indexed correctly and can be easily located when needed.

Here are the key benefits these elements bring:

1. Organizing Documents in Appropriate Folders

   Tags and keywords make it easy to group documents into logical categories or folders, whether by department, project, or any other relevant criteria.

   
   

2. Assigning Permissions

   A well-structured DMS solution enables administrators to control access to documents based on their types or classifications. By leveraging custom tags, businesses can restrict sensitive information to authorized personnel while establishing other files remain accessible to those who need them.

   
   

3. Implementing Document Destruction Policies

   Compliance with regulatory and organizational policies often requires the timely disposal of outdated documents. With custom tags and document types, businesses can set automated retention schedules, guaranteeing that documents are securely destroyed when they are no longer needed, thereby minimizing liability.

   
   

4. Facilitating Quick Search and Retrieval

   One of the most significant advantages of a document management tool is its ability to perform lightning-fast searches. Tags and keywords act as powerful identifiers, enabling users to locate specific documents with ease, even in vast repositories. This efficiency reduces downtime and empowers teams to focus on higher-value tasks.

   
   

2. Set Up Rules for Document Destruction

Storing documents indefinitely is neither practical nor necessary for most organizations. Retaining outdated or irrelevant documents can lead to unnecessary storage costs, cluttered systems, and potential legal risks. To address this, it is crucial to establish clear rules for document destruction in the DMS Solution, verifying a streamlined and compliant approach to managing document lifecycles.

Here are the key steps to effectively set up document destruction rules:

1. Define Retention Periods for Document Types

   Collaborate with key stakeholders, including departmental users and legal teams, to determine appropriate retention periods for each document type. These retention periods should be based on regulatory requirements, industry standards, and business needs. For instance, financial records might need to be kept for seven years to comply with tax laws, while marketing materials might only need a retention period of one year.

   
   

2. Include a “Retention Period” Field in the DMS

   A robust Document Management System (DMS) should have a dedicated "retention period" field for each document type. This field allows administrators to set specific timeframes for how long documents should be retained within the system.

   
   

3. Automated Expiry Date Calculation

   Once a retention period is defined, the document management system should automatically calculate an expiry date for each document based on its creation or last-modified date. This automated feature eliminates manual tracking, reducing errors and administrative overhead.

   
   

4. Notification System for Upcoming Deadlines

   To avoid unintended document deletions, the DMS Solution should include an alert mechanism that notifies users about upcoming destruction deadlines. These notifications provide a window for review, enabling users to decide whether documents need to be retained longer, archived, or permanently deleted.

   
   

5. Document Review and Intervention

   Users or administrators should have the ability to intervene before a document is destroyed so that in critical or exceptional cases, such as ongoing audits or legal holds, can be addressed appropriately.

   
   

6. Maintain a Deletion Log

   For accountability and transparency, the documentation management system should maintain a comprehensive deletion log. This log records which documents were destroyed, by whom, and when, assuring compliance with legal and operational standards.

   
   

3. Set Up Access Control Rules

Document security is a critical concern for any organization. Implementing robust access control rules to confirm that sensitive documents are only accessible by authorized individuals, protecting the organization from data breaches, inadvertent disclosures, and other security risks.

Here’s how to effectively set up access control rules in your Document Management System (DMS):

1. Support Multiple Access Levels

   A well-configured DMS solution should provide flexibility by supporting various access levels, enabling organizations to customize document access according to user roles, departments, and security requirements. Access levels typically include:

   • View-only Access: Users can view documents but cannot make any modifications.

   • Edit Access: Users can view and edit documents, making them suitable for team members actively working on specific files.

   • Admin Access: Users with full administrative privileges can add, delete, or modify documents and permissions, often reserved for system administrators or managers.

   • Restricted Access: Certain users or departments may be granted restricted access to specific documents based on the sensitivity of the information.

     
     

2. Restrict Unauthorized Access

   It’s critical to restrict access to sensitive documents based on established policies and individual roles. This includes:

   • Role-based access control (RBAC): By defining roles such as "HR Manager," "Financial Analyst," or "IT Admin," access can be tailored specifically to the duties and responsibilities of each role, reducing the risk of unauthorized access.

   • Document Type-based restrictions: Certain types of documents, such as financial reports, legal contracts, or employee records, may need stricter access control compared to others. Confirming these documents are only accessible by those with legitimate needs is a crucial part of maintaining document security in the DMS Software.

     
     

3. Provide Flexibility to Manage Permissions for Users and Groups

   Your document management software should be flexible enough to allow permissions to be set not only for individual users but also for user groups or departments.

   Key flexibility features might include:

   • Granular Permissions: The system should allow you to assign permissions on a document or folder level, enabling users to access only the documents they need.

   • Temporary Access: For projects or special initiatives, temporary permissions can be granted and set to automatically expire after a certain period. This helps prevent excessive or ongoing access after the task is completed.

   • Document Sharing with Permissions: In some cases, it might be necessary to allow a user to share a document externally (e.g., with a client or partner). The DMS Software should allow administrators to set specific permissions for document sharing, making sure that the external parties can only view or edit the document according to preset rules.

     
     

4. Audit Trail for Access and Activity

   For accountability and transparency, your document management service should maintain a detailed audit trail that logs all access and activities performed on documents, such as who viewed or edited a document, when it was accessed, and what actions were taken.

   
   

4. Capture Documents in the Correct Format

The quality of scanned documents plays a pivotal role in verifying that the information is both readable and easily processed. Poor scanning practices, such as using low resolution, overly large files, or saving in lossy formats, can result in documents that are difficult to work with, causing delays, errors, and potential loss of information. To achieve the best results and make the document management process more efficient, it’s essential to follow best practices for scanning and capturing documents in the correct format.

Here’s how to capture the documents correctly:

1. Scan Documents at 150-200 DPI (Dots Per Inch)

   Scanning documents at a resolution of 150-200 dpi strikes the right balance between image clarity and file size. Lower resolutions can compromise the legibility of text and details, while higher resolutions create unnecessarily large files that are difficult to manage and store. 

   
   

2. Use TIFF Format for Optimal OCR

   When scanning documents, it’s critical to choose the right file format for optimal text recognition. TIFF (Tagged Image File Format) is widely recommended for document scanning because it is a lossless format, meaning it preserves the original image quality without compromising detail. 

   
   

3. Proper Alignment to Avoid Lopsided or Unreadable Scans

   Proper alignment is crucial when scanning documents. Misalignment can result in scans that are crooked, lopsided, or difficult to read. Make sure that the document is placed flat and centered in the scanner to maintain a straight and uniform image.

   
   

4. Handle Document Imperfections

   While it’s not always possible to prevent wrinkles, tears, or marks on original documents, it's important to address these imperfections before scanning. If a document has visible wrinkles or folds, try to flatten it as much as possible to prevent the scanner from picking up distortion. 

   
   

5. Avoid Using Lossy Formats like JPEG

   While JPEG is a commonly used image format, it is not ideal for document scanning. JPEG uses compression that discards some of the image data to reduce file size, resulting in a loss of quality.

   
   

5. OCR the Documents

Optical Character Recognition (OCR) is a powerful technology that converts scanned images of documents into machine-readable text, transforming them into searchable PDFs. By leveraging OCR, businesses can significantly enhance document management systems, improving efficiency and usability. An effective OCR system brings a multitude of benefits, streamlining both document retrieval and data extraction.

Here’s how OCR improves document handling:

1. Extract Text Fields Automatically Using Pattern Recognition

   A well-designed OCR system can automatically recognize and extract text fields from scanned documents. This is particularly valuable for documents that follow consistent formats, such as invoices, contracts, or HR forms. 

   
   

2. Populate Metadata Seamlessly

   In addition to extracting text, OCR can be used to populate metadata fields automatically. Metadata includes critical information such as Employee ID, Employee Name, Date of Birth, and other relevant tags that help classify and categorize documents for easier retrieval.

   
   

3. Improve Document Searchability and Retrieval

   OCR enhances the searchability of scanned documents by converting text into an editable format. Once the text is recognized and indexed, users can search for specific words, phrases, or data points within scanned files in the DMS solution.

   
   

4. Reduce Manual Data Entry

   One of the greatest advantages of OCR is its ability to significantly reduce manual data entry. In many cases, organizations rely on employees to enter data from paper forms or scanned documents into digital systems, which can be time-consuming and prone to human error.

   
   

5. Enhance Document Organization and Compliance

   OCR helps businesses comply with industry regulations by creating searchable, digital records that are easy to access and audit. By automatically populating metadata, OCR makes it simpler to categorize and organize documents for easy retrieval, whether it’s for legal, financial, or compliance purposes.

   
   

6. Enable Advanced Document Analytics

   OCR technology can also support advanced document analytics, allowing businesses to gain insights from scanned documents that were previously difficult to analyze.

   
   

6. Smartly Categorize Using Automated Tools

Automation plays a crucial role in simplifying the process of document classification, helping businesses save time and reduce the potential for errors. While Optical Character Recognition (OCR) can extract basic tags and text from scanned documents, there may still be a need for manual input to capture additional or complex metadata. However, once all relevant tags are populated, the Document Management System (DMS) can take over and automate key aspects of document organization, security, and compliance.

Here’s how automated tools can streamline document categorization and enhance your DMS Solution:

1. Automatically Organize Documents into Correct Folders

   After OCR has extracted key data points and tags, automated tools within the document management system can use this information to categorize documents and place them in the appropriate folders.

   
   

2. Assign Permissions Based on Document Tags

   Another powerful feature of automation is the ability to assign permissions based on predefined tags and metadata.

   
   

3. Implement Destruction Policies Automatically

   With automation, businesses can easily enforce document retention and destruction policies based on predefined rules. Automation ensures that businesses are adhering to legal requirements for document destruction, minimizing the risk of retaining unnecessary or outdated information.

   
   

4. Improve Consistency and Compliance

   By leveraging automated categorization, permissions, and retention policies, businesses can guarantee consistent handling of documents while adhering to internal and external regulations.

   
   

5. Enhance Workflow Efficiency

   Automation not only speeds up the document management process but also allows employees to focus on more strategic tasks rather than spending time on manual document handling. With automated tools in place, employees can access documents faster, collaborate more efficiently, and reduce the time spent searching for or organizing files.

   
   

Why Choose EisenVault for Document Classification and Scanning Document Services?

At EisenVault, we simplify document classification by offering scanning and digitization services, and personalized consultation to set up essential tags, keywords, permissions, access control rules, and destruction policies tailored to your needs. Once configured, our advanced OCR technology automatically categorizes documents by extracting key information, tagging them, and organizing them into the right folders. This automated system reduces manual work, improves accuracy, and enhances document accessibility, creating an efficient and secure cloud document management solution that supports your business’s goals.