How to Organize Your Company Files in SharePoint for a Small Team

SharePoint document libraries are the right place for shared company files that multiple people need to access. Setting up a clean structure from the start prevents the tangled mess of duplicated folders, broken permissions, and files nobody can find that plagues most small businesses. This guide covers planning, structure, permissions, and syncing, with specific steps you can follow today.

What You Need

• Microsoft 365 admin or SharePoint admin access
• A plan for which teams or departments need shared file spaces
• A list of who needs access to what

Every Microsoft 365 plan that includes Teams also includes SharePoint. The document libraries behind every Teams channel are SharePoint libraries, even if your team never opens SharePoint directly.

SharePoint Sites vs. Document Libraries vs. Folders

Before building anything, understand the three layers of SharePoint file organization:

• SharePoint site: A container for a team or department. Every Microsoft Teams team automatically gets a SharePoint site behind it. Think of a site as a top-level workspace.
• Document library: A file storage area within a SharePoint site. Each site can have multiple libraries. Think of a library like a filing cabinet.
• Folders: Subdivisions within a document library. Use these sparingly. SharePoint works best with a flat or shallow folder structure combined with metadata columns for filtering.

The key recommendation is one SharePoint site per department or major function, with document libraries and metadata replacing deeply nested folders. If you are coming from a traditional file server with 10 levels of nested folders, this is a significant shift in thinking, but it pays off quickly in usability.

Step 1: Plan Your Site Structure

Keep it simple. For a company with 10 to 30 people, you likely need only two to four SharePoint sites.

Here is a practical starting structure:

Before creating any new sites, check what already exists. Each Teams team creates a SharePoint site automatically. If your marketing team already has a Teams channel, they already have a SharePoint site. Creating a separate SharePoint site for marketing would just create confusion and file duplication.

To see existing sites, go to the SharePoint admin center at admin.microsoft.com > Admin centers > SharePoint > Sites > Active sites.

Step 2: Create Document Libraries

Within each SharePoint site, create document libraries for major file categories. Each library should represent a distinct type of work or content.

1. Open the SharePoint site
2. Click + New in the top bar > Document library
3. Enter a name for the library (keep it short, use hyphens instead of spaces)
4. Click Create

For example, an Operations site might have these libraries:

• Client-Projects: All client deliverables and working files
• Templates: Proposal templates, SOW templates, project plans
• Contracts: Signed contracts and agreements
• Proposals: Active and archived proposals

Keep library names short and descriptive. Avoid spaces in library names because they get replaced with "%20" in URLs, which looks messy and can cause issues with some integrations.

To customize the default view, click the column headers and select Column settings > Show/hide columns. The most useful default view includes: Name, Modified, Modified By, and any custom metadata columns you create in the next step.

Step 3: Use Metadata Instead of Deep Folders

This is the step that separates a well-organized SharePoint from one that looks like a cluttered file server. Instead of creating nested folders like Clients > Smith > 2026 > Invoices, create a flat library with metadata columns that let users filter and sort.

To add a custom column:

1. Open the document library
2. Click + Add column in the header row
3. Choose the column type:
   • Choice: For categories like Client Name, Document Type, or Status
   • Date: For deadlines or effective dates
   • Person: For assigning an owner or reviewer
   • Number: For invoice amounts, project numbers, etc.
4. Enter the column name and options
5. Click Save

For a Client-Projects library, useful columns might be:

Once columns are set up, users can click any column header to sort, or use the Filter pane on the right to show only files matching specific criteria. This is dramatically faster than navigating five levels of folders.

When folders still make sense: if you need to apply different permissions to different sections of a library (for example, restricting access to certain client files), folders with broken permission inheritance are the way to do it. Otherwise, prefer metadata.

Step 4: Set Permissions

SharePoint permissions inherit from the site by default. Everyone who has access to the site can see every library and file within it. For most libraries, this is fine. For sensitive content like HR records or financial data, you need to restrict access.

To set permissions on a library:

1. Open the document library
2. Click the gear icon in the top right > Library settings > Permissions for this document library
3. Click Stop Inheriting Permissions to break the inheritance from the site
4. Remove groups that should not have access
5. Add the specific users or groups that need access, selecting the appropriate permission level:
   • Full Control: Can do everything, including managing permissions (use sparingly)
   • Edit: Can add, edit, and delete files
   • Read: Can view files but not modify them

Follow the principle of least privilege. Give people the minimum access they need. Not everyone in the company needs to see financial reports or personnel files.

Audit permissions quarterly, especially after employee departures. Former employees who were removed from Microsoft 365 lose access automatically, but contractors or external guests with direct permissions may not.

Step 5: Sync Libraries to File Explorer with OneDrive

Many employees are more comfortable working with files in File Explorer (Windows) or Finder (Mac) than in a browser. SharePoint libraries can be synced to the desktop so they appear alongside local files.

To set up sync:

1. Open the SharePoint document library in a browser
2. Click Sync in the toolbar at the top
3. Your browser will prompt you to open OneDrive. Click Open
4. OneDrive will begin syncing the library. Files appear under your company's name in File Explorer or Finder.

Enable Files On-Demand so that synced files do not fill up the employee's hard drive. With Files On-Demand, files appear in the folder tree but are only downloaded when opened. To enable this:

1. Click the OneDrive icon in the system tray
2. Click the gear icon > Settings
3. Under the Sync and backup tab, check Save space and download files as you use them

If your organization uses Microsoft Intune for device management (included with Microsoft 365 Business Premium), you can push OneDrive sync settings to all company devices through Intune policies. This ensures every employee's device is configured to sync the correct libraries with Files On-Demand enabled, without any manual setup on their part.

Step 6: Back Up Your SharePoint Data

SharePoint has built-in version history and a recycle bin, but these are not the same as a true backup. If a user accidentally deletes an entire library, or if ransomware encrypts your files, version history alone may not save you.

Dropsuite provides independent backup for SharePoint, OneDrive, and Exchange mailboxes. Athencia includes Dropsuite in its managed stack for all clients. With Dropsuite, your SharePoint data is backed up daily to a separate location, and you can restore individual files, folders, or entire libraries to any point in time.

Without a third-party backup, you are relying solely on Microsoft's recycle bin (93 days for SharePoint) and version history. That is better than nothing, but it leaves gaps for bulk deletions, ransomware, and retention policy mistakes.

Common Mistakes

• Creating too many SharePoint sites. More sites means more places to check and more permissions to manage. Start with the minimum and add sites only when there is a clear need.
• Deeply nested folder structures. If you are recreating your old file server's folder tree in SharePoint, stop. Use metadata columns for filtering instead.
• Not setting permissions on sensitive libraries. By default, everyone on the site sees everything. Break inheritance on HR, finance, and legal libraries.
• Not syncing libraries to File Explorer. If employees have to open a browser and navigate to SharePoint every time they need a file, they will store files locally instead. Sync makes SharePoint feel like a local drive.
• No naming conventions. Establish and enforce naming rules from day one. Files named "FINAL_v3_REAL_USE THIS ONE.docx" are a sign that no one agreed on a naming convention.
• Ignoring version history. SharePoint keeps version history by default. Make sure it is enabled and set to a reasonable number of versions (50 is a good default). This lets you recover previous versions of any file.

Need Help?

Setting up SharePoint well from the start saves hours of cleanup later. If you need help planning your site structure, configuring permissions, or migrating files from a file server or other cloud storage, contact Athencia. We set up SharePoint as part of every Microsoft 365 deployment.