Term
DMS
A document management system that stores, classifies, versions and gives access to contracts, invoices and other files in one place. It supports approvals and archiving in line with retention periods.
Updated
What it means
A DMS, document management system, is software that stores contracts, invoices, orders and other files in one place with an order a shared folder could never keep. Each document carries metadata, such as type, partner, date and amount, by which it can be found at any time.
The core functions are versioning, meaning a history of changes, access control, full-text search thanks to OCR, and an audit log recording who did what with a document. More advanced systems add approval workflows and retention periods.
A DMS is neither accounting software nor an ERP, but it is often connected to them: an invoice goes through approval in the DMS and reaches the books already coded and signed off. It is the core of document digitisation.
How it works in practice
With clients we have moved from paper binders to electronic documents that arrive in a shared mailbox, where the system recognises and files them. The director’s approval is recorded in the system itself and replaces a signature on paper.
For document archiving the DMS must guarantee that a stored document cannot be changed unnoticed and stays readable for the whole statutory period. For contracts signed with an electronic signature it must keep the signature with its validation, not just a PDF.
When choosing a DMS we look at where the data is stored, in cloud storage within the EU or on the company’s own server, how it is backed up and how it can be exported when changing supplier. Documents contain personal data, so GDPR applies to the system as well.
What to watch out for
A system where everyone files things their own way is just a more expensive shared folder. Before launch, agree the structure, mandatory metadata and naming rules, otherwise after a year documents are as hard to find as before.
The biggest risk is losing access. If the supplier ends the service or the company stops paying, access to the archive must not disappear. We therefore insist on regular data backup and export in an open format, so that the company has its documents available at any audit.
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