The key to successful document management in a company is a well-thought-out system for storing corporate documents. And it does not matter whether it is the storage of paper copies or the storage of digital documents. Due to the use of special software for organizing work online, new opportunities opened up for the development of a complete due diligence folder structure. Learn about the importance of a well-thought-out filing system in the company and what the internal due diligence folder structure looks like in our article.
What is a due diligence folder?
As such, there is no separate definition in the lexicon of document science for documents and folders used in the due diligence process. However, based on the experience of many companies that do or have dealt with such activities, there is such a concept as a data room index. It represents the totality of documents and files that are stored in a virtual data room.
If you apply this concept to the due diligence process, then the due diligence index is all the documents that are used in the due diligence process and structured according to the company’s data storage system.
What do I need to know about storing key documents about a company?
The folder structure that is used to store documents – particularly those that relate to a company’s operations – is necessary to:
- Optimize time for information processing;
- Reducing the cost of maintaining file storage systems;
- Providing a higher level of data protection, including corporate and confidential information.
The folder structure within the repository, which is used to conduct due diligence assessment, is a system of several levels, each part of which is linked to each other. Such a structure should primarily reflect the business model on which a company’s operations are based. In addition, it should be easy to use, with an intuitive system of searching for necessary documents which can be used by both company employees and third parties.
To create the most efficient system of storing information in the virtual data room, you can use the following tips:
- Start by organizing documents into the main category that displays the theme of a particular folder;
- If there is a need, you can divide important information into several main folders for better storage organization;
- Use a system of subfolders to store detailed information;
- Each sub-folder should be part of one of the top-level folders to ensure that the same type of information is stored;
- Each subfolder can contain smaller subfolders with important information for due diligence assessments.
The end result can be a whole system of interconnected folders. In order to ensure that the information placed in them can be searched and used effectively, you should also think about a search engine. You can set it up with virtual data room tools.