Digitizing Files - How to do it efficiently with AI

In every company, large amounts of data are created every day that need to be stored, protected and managed. Even today, many companies still rely on paper storage for this purpose. The disadvantage: mountains of files pile up in business premises this way. This also means that information is difficult to access. That's why more and more companies have switched to digital documents in recent years. As early as 2020, one in ten large companies with 500 or more employees (almost) completely dispensed with paper (Bitkom). That means 90 % of all companies have some catching up to do. 

What's the point of everything being digital? It has worked well up to now, after all. In this article, we'll give you information to help you prepare your decision for your level of digitization. In doing so, we explain, among other things, which retention periods you should observe and how you can benefit from the use of artificial intelligence in the Digitization process.

digitize files benefits

Why Companies should digitize Files

When companies have documents digitized, they benefit from two major advantages at first glance: They suddenly have more space and have digitally stored documents securely. However, when approached correctly, the digitization of files has significantly more far-reaching effects on internal processes:

Quick access

The ability to quickly retrieve digital documents using search capabilities streamlines the way employees access information. Instead of looking through physical folders, they can simply enter keywords or metadata to find the data they need. This minimizes time-consuming searches, increasing productivity.

Efficient collaboration

Digitizing files enables seamless collaboration between employees, regardless of their location. Documents can be easily shared, edited and commented on online. This allows teams to collaborate more effectively - without having to spend time and resources physically sharing documents.

Data security

In a paperless office, digital files can be protected with advanced security measures, including encryption and access controls. This minimizes the risk of unauthorized access or data leaks. Confidential information thus remains protected.

Disaster recovery

When companies have folders digitized and back them up regularly, they safeguard data from unforeseen events such as fires or natural disasters. This ensures the continuity of business operations.

Environmental friendliness

Reducing paper consumption not only makes good business sense, but is also environmentally friendly. Digitizing files helps reduce deforestation and reduces the company's environmental footprint.

Time and cost saving

Manual processes related to physical documents, such as sorting, archiving and copying, are time-consuming and cost-intensive. Automating these tasks through digitization leads to significant time and cost savings.

Scalability

As the company grows, there is no need to rent additional physical resources such as cabinets or storage. Companies can easily integrate new digital documents into the existing digital system.

Audits and compliance

Organizations are often subject to legal requirements and compliance policies that require proper document retention. Digital records make it easy for organizations to monitor and audit to ensure they comply with these regulations. This makes it easier to conduct audits.

Long term preservation

Paper documents are susceptible to wear and tear and aging. When companies digitize files, they ensure long-term preservation of information. Documents thus remain intact and legible over time.

Customer relations

The rapid availability of customer data enables better customer service. Employees can access relevant information more easily, resulting in improved service and stronger customer loyalty.

Types of Files that Companies can digitize

In practice, companies can have the following documents digitized, for example:

Finance

  • Invoices and receipts: These documents are relevant to the financial process as they represent the company's financial transactions and are required for accounting and tax returns.
  • Contracts and agreements: Contracts have financial implications as they define payment terms and arrangements. The finance department must ensure that payments are made in accordance with the terms of the contract.
  • Employee files and personnel records: Payroll and benefits accounting are key financial aspects related to employee files.
  • Financial and accounting documents: These include balance sheets, income statements, cash flow statements, and other financial records that reflect the financial health of the company.
  • Supplier information and purchase orders: The finance department is involved in the order placement and processing process, as costs, payment terms and invoicing play a role here.
  • Insurance policies and claims reports: Financial effects of damage or loss are captured by insurance policies and loss reports.
  • Travel activities and expense reports: The Finance department processes employee travel and expense reports to manage and control costs.

Marketing and sales

  • Marketing materials and campaign plans: These documents describe the company's marketing strategy and activities to promote products or services.
  • Customer correspondence and support requests: Here is about interacting with customers and their requests, which is relevant for customer relationship management and sales.
  • Product development plans and prototype data: Marketing and sales need insight into product development plans to plan marketing strategies and sales approaches.
  • Business analysis and market research reports: These documents provide insights into market opportunities and competitors that are important for aligning marketing and sales strategies.

Legal and Compliance

  • Contracts and agreements: Legal agreements are inherently legal and require legal reviews.
  • Patent and Intellectual Property Documentation: The protection of intellectual property requires legal and compliance aspects.
  • Compliance documents and legal documents: These are documents relevant to compliance with laws, regulations and corporate policies.

Technology and product development

  • Product development plans and prototype data: These documents are critical for product development and improvement.
  • Patent and Intellectual Property Documentation: This is about the protection of innovations and intellectual property.
  • Quality control reports and inspection records: These are important to ensure that products meet quality standards.

Environment and sustainability

  • Environmental impact and sustainability reporting: These documents demonstrate the company's efforts in environmental protection and sustainability.

Please note that the boundaries between the areas are often blurred, as many documents can be assigned to several business processes.

digitize files retention periods

Digitize Folders - Retention Periods for Files

Companies cannot always digitize all their folders immediately. This is because in many countries they are legally obligated to store data, documents and contracts in a timely manner and to make them easily accessible. So in order to digitize documents in a legally compliant manner, companies must observe various legal obligations. How long you have to keep files and when you can dispose of something depends on the country. In Germany, the deadlines below are important (source: IHK). The legal basis for this is found in Section 257 of the German Commercial Code (HGB).

Records that can be destroyed since January 1, 2023.Retention period in yearsDestructible documents from the years or with last entry in the year
General correspondence62017 and earlier
Personnel files102012 and earlier
Financial and accounting records102012 and earlier
Contracts and agreements52018 and earlier
Project documentation32020 and earlier
Supplier and customer files72016 and earlier
Tax documents72016 and earlier
Medical patient files301993 and earlier
Legal acts and statements of claim102012 and earlier
Insurance documents52018 and earlier
Payroll32020 and earlier
Rental and real estate documents102012 and earlier
Marketing and advertising documents32020 and earlier
Training and continuing education materials52018 and earlier
IT and technology documentation32020 and earlier

Please remember that the deadlines given are general guidelines and may vary depending on legal requirements and company policies. It is advisable to always consult a lawyer or tax advisor before destroying any documents.

digitize files step by step

Step by Step: Building a digital Strategy

So how do companies digitize their file folders? To tackle this efficiently, they need a sophisticated digital strategy:

  1. Preparation

    Analysis of the files: Determine which files should be digitized.
    Resource planning: Determine budget, personnel and technology.

  2. Technology selection

    Scan software selection-decide which software is needed for scanning.
    Hardware acquisition: purchase of suitable scanners and computers.

  3. Document preparation

    Removing staples, staples and other obstacles.
    Align documents for clear scans.

  4. Scan

    Load documents into the scanner.
    Set preferences: Select resolution, color mode, file format.
    Perform scanning: Scan documents and create digital copies.

  5. Data indexing

    Set metadata: File name, date, category, etc.
    Indexing of digital files for later search and organization.

  6. Document management system

    Selecting a DMS software: Decide which software will be used to manage the digital documents.
    Software setup: configure user access, folder structure and security settings.

  7. Document integration

    Linking with existing systems: Integrate digital documents with CRM, ERP, or other business systems.

  8. Quality control

    Checking the scanned documents for readability and quality.
    Ensure correct indexing.

  9. Metadata enrichment

    Adding additional information to documents for better search and analysis.

  10. Test phase

    Perform tests: verify that the digital documents are displayed properly in the software.

  11. Transition to digital work

    Employee training: ensure that everyone is familiar with the new system.
    Gradual transition: Start using digital documents for current business processes.

  12. Digital archiving and backup

    Back up digital documents to protected servers.
    Perform regular backups to avoid data loss.

  13. Monitoring and optimization

    Continuous monitoring: Verify that the system is running smoothly.
    Optimize processes: Adapt workflows to increase efficiency.

  14. Compliance

    Ensure that digital documents comply with legal and regulatory requirements.

Digitize Files with AI 

Having files scanned is a huge expense for which companies have to allocate resources. Alternatively, they can hire a service provider to digitize files. But even for this, companies need time and, above all, an appropriate budget.

Therefore, the most efficient way to digitize files is to use software with artificial intelligence.

In this way, companies not only accelerate the process decisively, but also profit from these benefits:

Automated data acquisition

When digitizing files with AI, the technology recognizes and extracts text on documents automatically. This means that not only are images of the documents created, but the actual content is also captured. In contrast, conventional scanners only deliver image files that do not provide direct access to the text.

Fast classification

AI uses algorithms to automatically classify scanned documents into different categories or types based on their content. This saves time that would normally be spent on manual sorting.

Intelligent indexing

When files are digitized with AI, relevant information in documents can be recognized and stored as metadata. This metadata will later be extremely useful in searching and organizing the documents. With traditional scanning, on the other hand, companies often have to add such metadata manually.

Error detection

AI is able to automatically identify discrepancies, inconsistencies or even incomplete documents. Such errors are easily overlooked during manual review. Scanners do not offer such a possibility for error detection.

Automatic tagging

AI can identify relevant keywords in the documents and automatically add them as keywords. This greatly simplifies subsequent searches for specific documents.

Pattern recognition

AI identifies recurring patterns in documents, for example in the form of data, text passages or other elements. This makes it possible to uncover new insights, trends and correlations - and thus make more informed business decisions.

Document link

AI automatically detects connections between different documents, even if they are not obvious. This capability makes it easier to find linked information, saving time.

Adaptive learning

Thanks to machine learning AI systems can continuously learn from their own actions and improve. Feedback from users is integrated into the system to increase the accuracy and efficiency of digitization over time.

Automatic translation

AI translates text in real time, making it easier to collaborate and share information across language barriers. Scanners do not have automatic translations.

Advanced search

AI realizes semantic relationships between words and concepts, which leads to more precise search results. This means that relevant documents are found even for complex search queries - even if certain keywords were not explicitly used.

Real-time analysis

AI analyzes the content of digitized documents in real time and provides quick insights. When using scanners, companies would first have to convert the documents before analysis is possible.

Digitize Files with Konfuzio

To digitize files with AI, companies can rely on Konfuzio software. Konfuzio uses optical character recognition (OCR) to read and analyze documents and extract information. The software can convert both printed and handwritten text into digital data.

Konfuzio automatically recognizes text structures, paragraphs, headings, enumerations, keywords, names and dates so that processing is exclusively automated.

This also means that companies do not have to go to the trouble of scanning paper documents, but can simply photograph them and then have Konfuzio sort, read and analyze them. In this way, they can efficiently digitize mountains of files.

Learn more about Konfuzio now!

FAQ

How can I digitize files?

Companies can digitize files in two ways: On the one hand, they can scan documents and then manage them via a scanning program. However, this is not only time-consuming, but also makes information difficult to access. On the other hand, companies can digitize files with AI. The advantage is that they do not have to scan files, but can simply photograph them and then have the AI automatically sort, analyze and evaluate them.

How do companies benefit when they have individual documents digitized?

By digitizing documents, companies can achieve a variety of benefits. Efficiency is increased because access to information is faster and less complicated. At the same time, paper costs are reduced because fewer physical documents are needed. Collaboration within the company is improved, as digital documents can be shared and edited more easily. In addition, the use of a digital archive enables easy data backup.

How does an AI help to digitize files?

An AI facilitates the digitization of files through automated text recognition, conversion of images into machine-readable text, and efficient data entry. It speeds up the process, increases accuracy, and enables smooth conversion of physical documents into electronic formats.

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Jan Schäfer Avatar

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