How Is Terminal-Digit Filing Used?

Even the best-organized filing system sometimes runs into problems. If you file customer accounts by last name, for instance, your S drawers will be overstuffed while Z, Q and X have lots of space. Terminal-digit filing is a way to distribute files evenly throughout your system.

TL;DR (Too Long; Didn't Read)

The terminal-digit storage method uses the last number in a sequence as the basis for ordering your files. Using terminal-digit filing makes it possible to distribute files evenly throughout your system

The Terminal-Digit Storage Method

Terminal-digit filing means organizing your files by the last digit in a set of numbers. For example, instead of filing customer or vendor records by business or personal name, you use phone numbers, Social Security numbers or assign an arbitrary number. All the nines are grouped together and are followed by eights, sevens and so on down to the zeros.

After putting numbers in terminal-digit order, you break them down further by using the rest of the number. With Social Security numbers, you could use the last four digits, for instance. All the Social Security numbers ending in nine go together, but within that group, 3459 precedes 7789, and 1029 comes ahead of both.

If you have large numbers of files — more than 1,000, say — you may find it more efficient to organize them by two terminal digits: 00, then 01, then 02 and so on. For more than 10,000 files, you may need three digits.

Why Use Terminal-Digit Filing?

Advocates for the terminal-digit storage method say it has several advantages.

  • Picking the last digit or the last two or three digits of a Social Security or business tax ID number is simple compared to using the entire number. Rather than reading 134-56-2220, 134-57-2219 and 133-89-2287 as entire numbers, staff can just look at the last two digits to know where they belong in the files.

  • Terminal-digit filing allows you to divide your file storage into 10 equal sections, or 100 for a two-digit system. Once your employees learn the system, they have a rough idea of where to put each file or where to look for it.

  • Because the files are evenly distributed through the system, you don't wind up with a massive bulge in one section, as can happen with alphabetical filing.

  • With fewer numbers to classify files, there's less likelihood of error. For example, 99, 86 and 43 are easier to read without transposing numbers than 876499, 217586 and 430143.

  • Since the files are evenly distributed, if you have to relocate them to another area or remove them from the storage area for disposal, the weeding and relocating will be even throughout the filing system.

  • It's more difficult for unauthorized personnel to find files they're not entitled to see.

Terminal-Digit Filing Drawbacks

Terminal-digit filing does have some drawbacks, so weigh the pros and cons before you adopt it.

  • If you already have a large filing system organized by some different method, changing to the terminal-digit storage method will take a lot of effort. It should pay off, but carving out time for such a major staff project may not be easy.

  • Terminal-digit filing looks unconventional and weird to people who aren't used to it. If your employees are accustomed to filing alphabetically, for example, it may be hard for them to adjust.

  • If individual files have a lot of subfiles or folders, terminal-digit filing can become rather cumbersome. It's also less useful if you have a small number of extremely large files, as can happen at some law firms.

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About the Author

Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com