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The Guide to Folder Structures: Best Practices and More

The Guide to Folder Structures with file structure tree diagram

What is Folder Structure?

What is a folder structure in the context of digital asset management (DAM)? A basic folder structure definition includes all digital files and assets hierarchically organized within a directory system.

This type of electronic file folder structure allows users to categorize digital files and resources for efficient storage, retrieval, and management so they can more easily locate and manage assets and maintain consistency.

These key components and file and folder structures naming conventions shape optimal DAM:

Hierarchy. File and folder structure is typically hierarchical. Parent folders or directories contain subfolders, which themselves may contain other subfolders. The result is a tree-like hierarchy that organizes assets based on their relationships and categories.

Categories and metadata. Each folder file structure represents a logical category or classification of assets. For example, individual folders might hold documents, images, logos, videos, or marketing materials. Each asset may need to be labeled with metadata (such as keywords, tags, and descriptions) with additional information.

Consistency. Establish a consistent naming and organizing convention for folders and files to ensure it is easy for users to navigate and locate assets throughout the file structure quickly.

Access control. Consider more restricted access control and permissions for folders which hold sensitive assets.

Version control. If versioning is essential, consider how you’ll manage multiple versions of the same asset. Some DAM systems have built-in version control features.

Search and retrieval. A well-designed file folder structure should complement a robust search and retrieval system. Users should be able to search for assets by keywords, tags, or metadata, even if they don’t know the exact file location or name.

Backup and archiving. Implement a backup and archiving strategy to ensure data integrity and preserve assets over the long-term.

Scalability. Plan for any file directory structure to accommodate a growing number of assets without becoming overly complex.

User training. Train users on the folder structure and the best way to organize folder structures for company assets to ensure consistency and efficient DAM across the organization.

DAM software. Dedicated DAM software and platforms optimize file folder structure with folder structure templates or advanced metadata management, version control, and collaboration tools.

Are Directory Structures and Folder Structures the Same?

In the context of file and data organization, these terms “directory structure” and “folder structure” are often used interchangeably. They both refer to a hierarchical electronic file folder structure. However, there are several aspects of both directory structure and file folder structure to be aware of:

Directory structure. Directories are often used as the primary organizing unit in the Unix/Linux operating systems. In these systems, a directory is a container that can hold files and other directories, creating the outer shell of a hierarchical directory structure. The overall layout of directories, subdirectories, and folders and files stored in them is the file directory structure.

Folder file structure. Folders are commonly used in graphical user interfaces (GUIs) like those found in Windows, macOS, and various file management software. They serve the same purpose as directories in these other environments: they hold files and other folders within a hierarchical file and folder structure.

See the folder structure diagram above.

What is a Directory Tree?

A directory tree, also known as a file tree or folder tree, is akin to a table of contents that visually expresses the organization’s hierarchical file folder structure. It represents directories (folders) and files and how they are nested and related to each other on a computer or within a file system.

This typical hierarchical folder structure example is made up of several components:

Root directory. The root directory sits at the top of the tree, represented as a single node or level, serving as the starting point for the entire file system.

Parent directory. Except for the root, each directory has a parent. The parent directory contains the current directory.

Subdirectories/child directories. Below the root directory and parent directories are subdirectories (also called child directories). These branch out from the root and may contain further subdirectories or simply files. Each is represented as a branch or node extending from its parent directory.

Files. The leaves of the directory tree represent individual files.

Hierarchy. The folder hierarchy itself creates a structure that naturally resembles something like a tree.

Hierarchical folder structures

Hierarchy folder structures organize digital files and data in a tree-like format with a single root directory at the top and branching subdirectories beneath it. This folder structure hierarchy is commonly used in file systems and digital asset management to store, locate, and manage data efficiently.

There is no one hierarchical folder structure definition since the exact implementation of these structures can vary depending on the specific needs and practices of an organization. However, there are several common features hierarchical file folder structures share:

Folder hierarchy structure. The folder hierarchy represents the data of a directory in a clear and organized way despite potentially numerous subdirectories and files.

Navigation. Users start at the top level, root directory and follow a path through the subdirectories to reach their desired file.

Folder/Subfolder Structure

File path. Each file within the structure is identified by its unique file path, which is a series of directory names separated by slashes. For example, hierarchical file and folder structures naming conventions for a file named “document.txt” located in a subdirectory named “Reports,” might suggest a file path of “/Reports/document.txt.”

Chronological. Assets are organized chronologically based on either creation or last modification date.

Functional/departmental. Assets grouped by department or function within an organization, for example marketing materials and HR documents would be stored separately.

Project-based. Assets are organized around specific projects or campaigns, each with its own folder containing all relevant assets. This structure is common in creative industries.

Asset type. Assets are categorized by type (videos, images, documents) and organized into separate folders for each.

Keyword/tag-based. Rather than relying solely on folder structures, assets are tagged with keywords or metadata so users can search. This enables more flexible, dynamic organization if metadata conventions are strictly adhered to.

Why Create Folder Structures?

File organization is essential to digital asset management and offers a number of benefits:

Ease of access. Well-organized files and folders are particularly critical for big data or large document applications.

Time efficiency. Logically organized files save users time searching for specific documents. This can increase productivity, especially in a work or project environment and when practicing good document management as well.

Reduced stress. Organizing files and folders can reduce stress and create a more pleasant and efficient work environment.

Collaboration. In a team setting, a consistent folder structure ensures that everyone knows where to find and save files. This improves collaboration and reduces confusion.

Backup and recovery. A clear folder structure makes backup and file recovery easier, allowing for selective backup of specific folders or types of files and restoration of specific data loss.

Version control. Well-organized folders facilitate version control and allow users to maintain different versions of files, track changes, and ensure they have up-to-date information.

Security. Organizing files ensures security; users can restrict access to certain folders or files, protecting sensitive information from unauthorized access.

Regulatory compliance. Some industries and organizations have specific regulations regarding data management and retention. Proper file organization helps ensure compliance.

How to Create a Folder Structure

Creating a folder structure is essential for organizing and managing files and data efficiently. The specific steps to create a file directory structure vary slightly depending on the operating system (OS):


Using File Explorer via the folder icon on the taskbar or Win + E, navigate to a relevant location to create folders (for example, for a document folder structure select the documents folder).

Right-click in the chosen location and select “New” > “Folder.” Enter the folder name. In general, good file and folder names should be meaningful and based on context, goals, and folder structure naming conventions.

Repeat to create additional folders within the existing electronic folder structure as needed. It is also possible to create a folder and subfolder structure by using the command prompt (CMD) or PowerShell by using the mkdir command to specify the path, such as C:\MyFolder\Subfolder.


Both Finder and the terminal can be used to create a data management folder structure on macOS. The user-friendly graphical Finder interface for creating and managing folders is easier for many users, but the terminal offers a text-based command-line interface for those who prefer automation.

Similar to the above methods, navigate to the chosen location for the business folder structure (for example, the Documents folder for a document management folder structure). Right-click or control-click in the desired location and select “New Folder” or use Shift + Command + N to create a new folder. Users can also drag and drop and organize specific folders and files.

Name the folder based on a folder naming structure so it makes logical sense within the overall goals for the folder structure itself. Repeat as needed to create additional folder/subfolder structure.


Typically, creating a document control folder structure on Linux is done using the command-line interface via the terminal window. Choose the desired location for the folders and create the basic structure. Name the folders and organize the folder structure using commands like mv (move) and cp (copy).

Folder structure naming conventions can vary depending on the context and the specific needs of a project or organization. However, there are some common conventions and best practices for folder naming in structures across operating systems that keep file and folder organization consistent and efficient:

  • The CamelCase convention capitalizes the first letter of each word in a folder or file name without spaces. For example: MyDocuments, ProjectFiles.
  • The snake_case convention uses lowercase letters and underscores (_) to separate words in folder or file names. For example: user_profile, product_catalog.
  • Similar to snake_case, kebab-case separates words with hyphens (-) instead of underscores. For example: user-profile, product-catalog.
  • The dot.notation separates words in folder or file names with dots (.) and is commonly used in web development to name files and directories related to packages or namespaces. For example:, my_project.utilities.
  • Prefixes or suffixes can indicate the type or purpose of a folder or file. For example: src for source code or docs for documentation.
  • Version numbers can clarify projects with multiple versions or releases, for example: v1.0, v2.0, release-3.0.
  • Date-based or chronological systems organize files or folders chronologically. For example: 2023-09-01 for September 1, 2023, or 2023-09 for the entire month of September 2023.

These common conventions limit special characters and use rules and other tools to maintain consistency for electronic folder structure strategies.

Folder Structure Best Practices

When considering how to organize a folder structure for any particular purpose, it is important to keep some electronic file organization tips and best practices in mind.

File folder structure best practices vary depending on context and specific organizational needs. However, some general folder best practices for business folder structure can ensure files are organized and easier to manage and locate:

Use descriptive file and folder names. To enhance folder organization, use specific folder names. Good file names and file naming conventions are clear and descriptive enough to allow anyone to understand their contents without opening them. Avoid generic names like “new folder” or “miscellaneous.”

Keep it simple. Avoid overly complex hierarchies and file structures. Deeply nested folders can make it difficult to find files and can become unwieldy.

Consistency. Establishing and adhering to a consistent naming convention part of core file and folder structure best practices. Be logical, grouping based on factors such as category or function.

File folder structure template. Company folder structure templates, sometimes called business folder structure templates, are predefined, organized blueprints for how to organize data, files, folders, and subfolders within a project, organization, or system. These best practice folder structures offer consistency and clarity for individuals or teams in how they manage, access, and maintain their data.

Use subfolders as needed, but sparingly. Subfolders can add more granular electronic file organization, but don’t go too far. A few well-placed subfolders are far more effective than excessive layers of nesting.

Avoid special characters and spaces. Except where they are part of the language and naming conventions as described above, stick to alphanumeric characters, dots, hyphens, and underscores in folder and file names to avoid issues on some platforms.

Version control. A dedicated folder or repository can be a useful piece of file structure organization for projects that require version control.

Backup and redundancy. For any organization, business folder structure best practices include developing a backup strategy, and ensuring the folder structure supports regular backups to prevent data loss.

Documentation. Generally, document folder structure best practices also suggest including a documentation folder for the project or files which may include README files, user guides, or any relevant file organization notes.

Accessibility and sharing. Based on goals for sharing and collaborating on files, ensure the computer file structure organization allows for ease of use among team members.

Regular maintenance. Periodically review how to organize electronic files within the system and revise the folder structure as needed. Remove outdated or unnecessary files and folders to keep the file organization structure manageable.

Use file naming conventions. Apply consistent file naming conventions when organizing electronic files within each folder. For example, you might use prefixes like “ProjectName-Feature” for files related to a specific project or feature.

Use electronic folder organization tools and software. Specialized tools or software for managing folder structure can help automate organization and improve collaboration.

In fact, specific tools have their own best practices in folder structure management. For example, Outlook folder structure best practices include flagging important emails, using folders to store and archive messages and to keep a cleaner inbox, and creating rules for a more streamlined experience.

Among the SharePoint folder structure best practices are the use of metadata and tags, standardized naming conventions, access control, version control, and document check-in/check-out.

These folder structure organization best practices should be adapted to fit specific organizational needs.

Folder Structure Examples

In addition to the hierarchical file folder structures described above, there are other business folder structure examples to consider:

  • Functional/departmental assets are grouped by department or function within an organization, for example marketing materials and HR documents are stored separately.
  • Date-based file structure and organization. Chronologically organized folder structures sort files by date, which is particularly useful for Use a consistent date format for these electronic file organization systems.
  • Categorical structures group files into specific folders based on categories such as topics, projects, or themes.
  • Project-based assets are organized around specific projects or campaigns, each with its own folder containing all relevant assets. This folder structure example is common in creative industries.
  • Alphabetical electronic folder organization can be helpful for quick reference.
  • Departmental or team structures are useful in an environment where files are organized by these kinds of working groups.
  • Client or customer based structures are centered upon one folder for each client or customer—a common folder structure for small businesses, in accounting and law.
  • Product or service based structures include all relevant files for each service or product in its folder. This is a useful business folder structure example for tech and software products, for example, that each carry their own documentation.
  • Geographical structures are a more traditional, enterprise-focused folder structure example that tend to work across larger corporations with hubs in different locations.

How SuiteFiles Streamlines Document Management

Ability to recover folder structure largely depends on data recovery tools and methods, as well as the state of the storage media in question.

However, generally speaking, to recover deleted files with folder structure intact:

  • Stop using the drive immediately. If files or folders are lost, stop using the storage device where the data was stored to prevent overwriting or further damage.
  • Identify the cause. Determine why the files or folders were lost. Possible causes of loss include accidental deletion, formatting, corruption, or hardware failure.
  • Use data recovery software. Install and run the software on a different drive or computer to avoid overwriting the lost data, recover lost files, and maintain their folder structure.
  • Select the storage device. Choose the internal or external hard drive, USB drive, or SD card to recover files from.
  • Select the right scan mode. Choose a mode designed to recover deleted files specifically. Many data recovery tools offer “deleted files” or “recycle bin” recovery modes, for example.
  • Scan, preview, and recover. After scanning, the software will display a list of recoverable files and folders. Select targets to recover, and specify a new location where the recovered data should be saved.
  • Verify recovered data. After recovery, verify that the files and folders are organized correctly and that the data is intact. Files should be recovered with their original folder structures intact, the way they were before the loss.
  • Backup and restore. After successful recovery, create backups to avoid future data loss.

Ability to recover folder structure from formatted drives is a bit more complex, because formatting a drive essentially erases the file system metadata, including the folder structure. However, by following the same steps outlined above, it still  may be possible to recover the folder structure to some extent:

  • Type of formatting. A quick format may not erase the data but may remove the file system’s references to it. In contrast, a full format erases the data more thoroughly.
  • File system. The file system used on the drive can affect the possibility of folder structure recovery. NTFS and exFAT, for example, may leave behind more recoverable data than FAT32.

Advanced data recovery software. To recover folder structure from a formatted drive, use software that can analyze and reconstruct the file system and directory structure.

How SuiteFiles can help with Business Folder Structure and Electronic File Organization

Deciding on a method of document management is no easy task. If you can’t efficiently navigate a sea of files, you risk getting lost amongst them and maybe even a verbal confrontation with your computer! To help you confidently navigate your files, we suggest organizing them using a robust folder structure. Let’s look at the benefits of folder structures, compare alternatives such as metadata and look at some examples of the best folder structure for business

What’s document management?

Chances are, you already have some form of document management – even if you’re not calling it that! Document management is using software to organize, manage and track your accounting practice’s files. Folder structures act as the organize function of document management, using folders and subfolders to keep client files both tidy and secure.

Folder structure matters

As mentioned above, in addition to day-to-day needs to access and update files, you’ll likely need to save and be able to quickly retrieve client files. For example, to comply with an audit. A solid folder structure allows you to do this efficiently by providing a roadmap to any file you need access to. 

Folder structure vs. metadata

Depending on your current document management software, you might already be using folder structures or you might be using metadata. Metadata is descriptive information you link to a file. For example, title, date, client name and keywords. Metadata relies on you and your colleagues entering full information and using agreed on conventions consistently. With that, you have searchable files. Without that, you can lose visibility of what files exist. An advantage of metadata is that it allows for the same file to be categorized under multiple tags whereas folder structure requires you to file under X or Y folder. Although folder structures demand clear cut choices, it’s easy to create a logical folder structure which will guide you to make those decisions. 

Folder structures are visual, typically intuitive and allow you to explore for yourself when you don’t know exactly what you’re looking for. Say you want to know what files are available for a certain client. Follow the folder structure and you’ll have the information you’re looking for in a matter of seconds. But what if you know what file you’re looking for, just not where it is? Folder structures often make use of search functionality which means you can search for files without having to know the folder they’re in. Of course, accessing files is only one piece of the puzzle. Ensuring staff can confidently use folder structures is a different concern. Fortunately, anyone who’s used a computer to open documents has used folder and file and will be familiar with the logic behind folder structures.

If you’re worried about staff making too many folders or accessing sensitive information, you can use permissions to customize their access or lock certain folders to decide who should be able to access them.

SuiteFiles, and most accounting practices, use folder structures to group files together in a logical hierarchy. If you’re currently using metadata and want to switch to folder structures, it’s not a problem. At the migration stage, SuiteFiles can convert from metadata to folder and file, leaving out any historic metadata that hasn’t been used. 

Let’s look at an example of how to organize your electronic files using a clear folder structure. 

For a client-based folder structure, accounts using SuiteFiles typically use a folder structure like this. 

Begin with the Organisation Name > Financial Year. 

Add Companies Office/your country’s business registry service, Correspondence, Permanent and Workpapers.

Under Workpapers, we suggest adding GST or VAT, Inland Revenue/your country’s Revenue Department’s Reports, Source Documents and Trial Balance

Boost your file management with our definitive guide to the folder structures side of digital asset management. Take a tour through the most popular folder structures amongst accounting practices then organize your files using our templates.

About SuiteFiles

Document creation, collaboration, and signing all in one spot. SuiteFiles is simple – yet powerful – document management software for accounting and professional services firms. Our workflows are exactly what small to mid-sized firms need to grow along with their clients. We back your daily activities, integrating with Xero, Karbon, Microsoft 365, QuickBooks Online, and more. 

We’re on a mission to give firms of all sizes enterprise-grade solutions and service that meets them where they are in their growth trajectory. The result? A simple, scalable, intuitive platform that your team and clients will actually enjoy using. Our product development and customer support teams are responsive – meaning you have people invested in you getting the most out of SuiteFiles. With SuiteFiles, your document management needs are taken care of and your IT burden is lifted allowing you to increase billable hours and strengthen relationships with your clients. 

SuiteFiles co-founder and CEO Andrew Sims says “When we first built SuiteFiles on top of SharePoint we debated at length whether to use folders or metadata but the answer was simple once we started talking to customers – folders! Everyone knows and understands folders so why make life harder when changing to SuiteFiles, keep folders and you don’t have to learn how metadata works.”

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