There's a well-known saying when it comes to filing systems: Not everyone has the time to tidy up, but everyone has the time to search. To optimize digital document filing in your business, we provide tips on folder structure with, among other things, the "7-Folder System" that can help you structure your files in a better way.

✔️ General characteristics of good folder structures‍

In general, it should be noted that a digital folder structure should be conceptualized for long-term usage. With this in mind, 3 core properties of folder structures are important: 

• Flexibility: A good digital folder structure should be flexible. This means that it should be capable to reflect changing conditions within the company. For example, new emerging topics should be seamlessly addible in the form of (sub)folders.

• Comprehensibility: Secondly, a folder structure must be intuitively understandable for all team members. There should be no need for explanation due to complexity or unknown technical terms.

• Transferability: Thirdly, a clear digital filing structure should also be transferable to other systems. What works on the PC should also work in the cloud.
  

Besides, some rules should be considered, which can generally be applied for establishing digital folder structures.
The basic rule is: Don't save files on your desktop. Saving files on the desktop lacks the structure and the features which folders have (sorting function by date, alphabetical order, etc.).
At most, you should use folders placed on your desktop for document storage. Folders ensure a better overview than loose files on the desktop. 

Further advice is not to store files on local hard disks, but on company servers or in the cloud. This enables location-independent access to these files by all employees. It also eliminates the need for manual sharing of documents via e-mail or a chat tool. 

Moreover, documents in the cloud function as a single point of truth, meaning that only one single version of a file exists. Since everyone is working on the same file online, there is no risk of overwriting files by uploading an updated version of the same file.

Folder usage types: - Minimalists, ↔️ Horizontalists and ↕️ Verticalists

Generally, 3 types represent different preferences for folder structures:

1. Minimalists: the Minimalists usually use only one or a few folders. Such a folder can for example be called "customer communication". 
   Advantage: Low complexity of folder structures.
   Disadvantage: Clutter within the folders. Often the search function must be used to find something.
   

2. Horizontalists: The horizontalists go broad with their folder structure. If there is no suitable folder, a new folder is created on the same hierarchically, horizontal level. For example, next to the folder "Customer communication" a folder "Invoices customers" is typically created by them.
   Advantage: Specific folders for specific topics.
   Disadvantage: The danger of unnecessarily using too many folders
   

3. Verticalists: Here the branch structure of known computer systems is commonly used. Verticalists work with hierarchy levels of folders. The respective folders have a set of subfolders, which usually have again different subfolders.
   Advantage: detailed and well-structured filing.
   Disadvantage: with too many folders on one hierarchy level it becomes confusing and the danger of quickly using the wrong subfolder becomes greater.
   

7-folder system for document filing 📂📂📂📂📂📂📂

When it comes to filing systems, surely, everyone should use the system that works best for them. If you are already using a system that works very well for you, that´s also fine. In addition, however, scientific studies give us recommendations for filing systems for us to use. One of these suggested methods which we´ll describe in further detail is the 7-folder system.

The digital 7-folder system is based on a three-level hierarchy folder structure with seven folders per hierarchy level max. This means that the highest hierarchical level (with general main categories for folders) may contain up to 7 folders.

At the second level, there are then again 7 folders (7*7=49). In the lowest, third level there is then again a maximum of 7 subfolders (7*7*7=343). In total, with level 1 (7), level 2 (49) and level 3 (343), we arrive at a total maximum of 399 folders.

🎓 Why are 7 folders the sweet spot for your folder structure?

The limitation to 7 folders per hierarchy level goes back to studies by the American psychologist George A. Miller. According to “Miller's Magic Number Seven”, people can store a maximum of 7 ± 2 units of information (chunks) per category in their working memory. The 7 folders represent 7 chunks/blocks from different topics. For example, a category for the most important 7 categories of business projects makes sense. We can therefore draw the line at seven topics to logically sort documents into one of the different folders. Moreover, from a scientific point of view,  we can remember this structure best, to be aware of where we filed something.

Examples of a 7-folder structure:

Whether 7 or fewer folders represent the best filing system for you depends on your preferences (Minimalist, Horizontalist, Verticalist). The number 7, where it does not always make sense, is not set in stone. If you have fewer topics to categorize, use fewer folders. However, be careful not to exceed the number 7 - otherwise, it will become more confusing. 

Examples of the 3 levels of the 7 folder structure:

Level 1:
1_Management
2_Projects
3_Finance
4_HR
5_Sales
6_Marketing
7_Partner

Level 2:
2_1_Projects_Rebranding
2_2_Projects_CO2_Footprint
2_3_Projects_Logistics_optimization
2_4_Projects_Website
2_5_Projects_New_Markets
2_6_Projects_Digitization
2_7_Projects_Employer_Branding

Level 3:
‍(Exception in this example: Only 3 markets are target regions, therefore only 3 folders)
2_5_1_Projects_New_Markets_Germany
2_5_1_Projects_New_Markets_Austria
2_5_1_Projects_New_Markets_Switzerland

🔎 When are exceptions recommended in the 7-folder system?

Exceptions are recommended if the folder structure doesn't allow 7 different topics. In the example above, at level 3, the company goal is to enter 3 markets. Therefore there should be only 3 subfolders in this subfolder. 

For other, more abstract topics, which can easily be fanned out in terms of topic diversification, it is recommended to adhere to the number 7.

Also important: The appropriate naming of files. In contrast to physical folders in a filing cabinet, digital environments offer the advantage that everything can be searched for specific terms. If you search for a specific term on your device and if your files were named consistently and easily systematically, the chances of finding them are high. If you want to know more on the topic of how to name files in a structured and schematic way and want to have more advice considering digital folder structures we can recommend this article by CAYA (in German) to improve your digital filing system.
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This is a guest article by CAYA.
With CAYA you receive your daily mail online. When using CAYA, your physical mail (letters) is forwarded to one of our scan centers where it is digitalized in a highly automated process and instantly available within the CAYA platform afterwards. Furthermore, within the CAYA Document Cloud, you can manage and edit your documents all in one place. Simple, reliable, efficient. With over 20,000 customers and a rating of 4.7 / 5 ★ CAYA is the leading provider in Germany.