We all love when things are in order — everything is in its place and accessible at any time. Working in this kind of environment is easy and supports the workflow. So, why wouldn’t we use this sort of structure in our file systems? This is what data room indexes are for.
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What is a data room index?
A data room index is a table of contents for your data room. It is a list of all the documents, folders that are inside of your virtual data room.
A well-organized data room index can save you a lot of time and money. It is a map of where your most important documents are, so it is important to take care of them. A data room index can be compared to a table of contents in a book because it illustrates what kind of structure is inside of your VDR and where it can be accessed.
Tips for organizing a proper data room index
There are a couple of things that you could do to make your data room index more organized:
- Step 1. Create a few top-level folders. This creates an overbearing structure.
- Step 2. Make sure your sub-folders are detailed, and you know what is inside of them. The structure needs to be filled with readable folders.
- Step 3. Naming should support your system, not make it more difficult. So, to make those folders more readable, use a naming system that will help facilitate that.
If you follow these steps, you should be able to organize your data room index. Let’s now learn why using a virtual data room can be beneficial.
Why use a virtual data room?
Using a virtual data room comes with many advantages, including:
- Bank-grade security features. The most important company files are kept in safe, online storage.
- Time and money cuts. You don’t have to store your documents in a physical space — which incurs multiple additional expenses.
- Easy communication within the data room. Through a variety of comments and Q&A tools, you can get the point across much more quickly.
- Indexing services offered by the best virtual data room service providers. Visit our main page to check out what those leading virtual data room providers are.
As you can see, some providers already include indexing in their services. Indexing is best explained in an example of a data room for due diligence.
Due diligence and a data room index
There are loads of documents needed for due diligence. Preparing each of them is time-consuming, but bundling it with an unclear structure could result in a disaster. This is the list of the most common:
- Structure of company and legal
- Trade register data
- Licenses, approvals, or certificates
- Shareholder files
- History of the corporation
- Documents of incorporation
- By-laws
- Lists of shareholders
- Intellectual property and trademarks documents
- Customer contracts
- List of the company’s biggest customers or channels
- Supplier agreements
- List of employees
- Contracts of head employees
- Working contract files
- CVs of personnel
- List of all lease agreements
- Company guarantees
- Financing agreements
- Insurance policies
- Audited financial statements
- Current business plan
- Tax returns
This is a lot of data to go through. If you had a clear structure created to support all of those files, managing due diligence would be almost effortless. This is why creating a data room index is so important. The list above will guide you through creating convenient files and folder structures.
Wrapping up
Handling your company’s documentation may be a tiresome task. However, creating a structure to support this task might be a solution you have not thought of. If you follow our guide on how to create such a structure, we are sure that you will be able to combat any organizational task. And if your company needs to conduct due diligence, you will already know how to order your documents to make them accessible to authorized users.
