Digital filing

In this article you will learn:

  • Why the switch to digital filing is worthwhile
  • The most common digital filing systems
  • For which contracts is a digital filing suitable
  • The next generation of digital filing

How many contract documents does your company keep? No matter what number you give: In a few years, it will be twice as many. This is because corporate relationships are becoming increasingly complex in our closely networked, agile business world.

There are more and more...

  • ...subscription contracts instead of one-off payments
  • ...contracts with freelancers
  • ...outsourcing contracts
  • ...Software licences
  • ...Cloud contracts
  • ...SaaS subscriptions (SaaS=Software as a Service)
  • ...distribution channels
  • channels
  • ...Partner contracts

In addition, there are still the classic contracts: Rental contract, purchase contract, financing contract, insurance policies, etc.

Conventional paper filing systems can no longer cope with this rapidly swelling flood of documents. File folders are bursting at the seams and file shelves are sagging menacingly.

In addition, traditional filing systems are poorly suited to the efficient handling of modern contract management:

  • Where do I place the cloud storage contract?
  • Should I print out the contracts sent as PDF files and file them in the folder? And where to put the PDF file? (double work)
  • How do I find all contracts related to service provider XY within 5 minutes?
  • How can we remember all the due dates that are in the contracts?
  • How much will we have to pay for current contracts in 6 months' time?

The filing structure is much, inflexible and the content cannot be retrieved efficiently.

The deceptive security of paper

Why do millions of companies go through the hassle of keeping contract documents in paper form? The answer certainly does not lie in the practical benefits of ring binders, but rather in the psychology of paper: paper gives us a sense of security.

We hold something concrete in our hands. We have a (literally) "tangible" contract with the signature of the contracting party visibly written in by hand. However, this security is deceptive.

A contract can be printed on spotless white 100-gram paper with fine embossing, come with beautiful ornamental lettering and a noble, shiny paper clip - and still have highly questionable content that can ruin the company.

If a contract were safe only because it existed in paper form, then many lawyers would be out of a job. Ultimately, it is the content of the contract that matters, not its physical form.

Signatures on a scanned contract document are also recognised as valid in court. Even contracts by e-mail text are legally valid, provided they are formulated clearly enough. So why stick to paper? Wouldn't it be better to switch to digital filing as soon as possible?

Why the switch to digital filing is worthwhile

Digital filing systems bring a lot of tangible benefits:

  • Searchable. You can search contracts
  • Easy folder handling. Folders can be created, renamed and moved in a flash.
  • Flexible folder structure. You can easily adapt the folder structure to new, changed requirements at any time.
  • Hierarchical structure. If you want, you can even realise a deeply nested hierarchical folder structure - something that would simply be impossible with ring binders.
  • Environmentally friendly. In the long term, less paper is needed. The environment says thank you.
  • Sharing. If you pass on copies of contracts to colleagues or partner companies, this is done with a click of the mouse. Your photocopier has had its day.
  • Access control. You can specify precisely who should have access to contract documents and when.
  • Fuse. Hopefully your office will never burn down. Nevertheless, you should also think about what happens if you can't get to the office quickly. With a digital filing system, it's easy to back up your entire contract portfolio in a matter of minutes.
  • Versioning. For contract renewals, simply save the new version and move the old one to the archive.
  • Capacity. Digital filing allows you to have an infinite archive. You never have to worry about filing capacity. Because even a conventional laptop with 500 GB of storage space - or an external hard drive - can easily store 500,000 PDF pages. This corresponds to the content of 833 bulging Leitz folders [1].
  • If this is not enough, simply store the contracts in the cloud. There, 1-2 terabytes are nothing unusual.

[1] A Leitz folder holds about 600 sheets of paper. A PDF page filled with text is on average 1 MB in size.

Many a company may be hesitant to replace its cherished file folders with a digital filing system. "Better the paper in the hand than the PDF in the cloud" some may say to themselves (in variation of the proverb "Better the bird in the hand than the pigeon on the rooftop"). People have been keeping paper files for decades and are familiar with the filing structure. So why introduce something new? Admittedly: It is uncomfortable to discard old habits and learn something new. It takes work to scan contracts and file them into a digital folder structure. But at some point you have to start your journey into digitalisation. We say, "Even a journey of a thousand miles begins with one step." (Lao Tzu). And contract documents are an extremely important first step! The advantages for digital filing are therefore obvious.

The most common filing systems

We asked medium-sized German companies how they file their contracts digitally. What surprised us: Almost only the large companies use special software systems such as SAP or other ERP software. The majority of SMEs take a much more pragmatic approach. Below we present the three most common digital filing systems.

Excel lists

Strictly speaking, Excel lists are not real digital files. This is because the contracts still exist in paper form. Only their contents are transferred to Excel lists. Usually, only the agreed amounts and the deadlines are recorded.

You don't get far with this system, because it is very labour-intensive and error-prone.

Local memory

With this system, all contract documents are scanned and stored on the PC or local server. The ring binders are replaced by a digital folder structure that organises the PDF documents in a - more or less - clear manner.

The main problem is the mostly missing searchability of the scanned documents. This is because not all companies have the necessary software to read the text in the scanned pages.

If information is needed in a contract, one simply clicks through the folders and files. If it is not known from the outset which contract contains the required information, many documents have to be clicked on, opened and read individually. A mere file repository is not enough to manage contracts efficiently.


In sectors where the majority of contracts are exchanged via email, it often happens that the contracts are simply left in the email system: The email client (Outlook, Gmail, etc.) becomes the database. Admittedly: Folder structures can also be realised here; and e-mails are also searchable.

But overview? Not a chance. Flexible adjustment of the folder structure: tricky. Many a mail server has caused problems when trying to change the folder structure of the e-mail storage. When changing the mail provider or the mail client, it can happen that mails get lost. And if you have to hand over contract management to a colleague or another department, then the email filing system becomes a complete nightmare.

The next generation of digital filing: slim and smart

The latest generation of digital contract management comes with built-in intelligence. You store the digitised contracts in the cloud, where they are safe from loss and can be easily managed by distributed teams. It is no longer humans who record the contents of these contracts, but an artificial intelligence: this reads out all the essential data - subject matter of the contract, contractual partners, agreed amounts, deadlines - and makes them available in clear databases and dashboards. A utopia? No. This digital contract management with built-in intelligence already exists. And it has a name: ContractHero. You can find more information about the contract management software here..


What is a digital filing system?

A digital filing system is a software system that organises and stores digitised documents.

What are the advantages of digital filing?

Digital repositories are searchable, flexibly customisable and can be structured (almost) as required. They facilitate versioning, sharing, backup and access control of business documents.

What solutions are there for digital filing?

For larger companies, there are enterprise solutions such as SAP or other ERP software. SMEs usually use local PC storage with a suitable folder structure or simple Excel lists for contract management. Far more efficient solutions are digital filing systems with built-in intelligence such as ContractHero.

Sebastian Wengryn

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