Centralized & Decentralized Filing | Meaning, Merits, Demerits

The document and records concerning a particular department of the business enterprise can be filed either at the department itself or in any other central place. Thus, a business enterprise can have either a decentralized or centralized filing system. Each system has its own merits and demerits. We shall now discuss the features of the two systems, their merits and demerits.

What is a Centralized Filing System?

Centralised Filing System
Centralized Filing System – Meaning, Advantages, Disadvantages

Centralized filing system is one where all the filing equipment and personnel are located in a single section. In other words, under centralized system, all the records of the business firm (relating to activities of all the sections or departments) are filed in one place or in the central office.

This place is usually called as filing section. This system implies that individual departments have nothing to do with the filing of records.

Merits of Centralized Filing

Centralized filing has several points to its credit. The following are some of the benefits of centralization of filing.

1. Superior equipment and costly mechanical aids can be installed and operated efficiently and economically.

2. Experienced staff in small number is sufficient to handle the work. The skill and experience of the staff would ensure maximum benefits.

3. Staff and equipment will be utilized to the maximum whereas in a decentralized filing, their services cannot be fully utilized.

4. Supervision in a centralized system shall be usually very effective. Hence, chances for misfiling are avoided completely.

5. The individual work rate would increase, as specialist staff would become experts in their duties.

6. It is easier to cover for absent members of the staff because personnel in the section shall be familiar with each other’s work.

7. A standardized filing system can be devised and put into operation. All the staff members in the section would be well acquainted with the system.

8. Close control over works quality and the movement of documents could be exercised.

9. Duplication of equipment and copies of records would be avoided.

Disadvantages of Centralized Filing System

The possible disadvantages of centralized system include the following:

1. If the filing staff are not adequately trained and have no specialized trade knowledge, it shall lead to misfiling.

2. Since all the records are stored in one place they will become more vulnerable. Consequently, the risk of loss due to theft, fire etc. can be increased.

3. There may be delay in making files available. Since the whole work is performed by a few staff members, delay cannot be avoided. The workload will also be more.

4. Chances for misfiling will increase considerably. Misfiling will lead to unnecessary delay in tracing out the documents and they cannot be produced promptly.

5. Where records are needed frequently by departments, centralization of files will cause much inconvenience. This may also cause frequent delays.

6. Centralized filing would result in increased staff costs.

7. The central department often tends to become a repository of all unwanted and unnecessary documents of all other departments.

8. Telephone enquiries cannot always be answered immediately if records are not on hand.

9. The real needs of the user department shall become secondary to the established routines and regulations of the central filing department.

10. Certain departments may find that the system of classification of files adopted by the central library is not the best one for referring their records.

Decentralized Filing or Departmental Filing

Decentralised Filing System
Decentralized Filing System – Meaning, Advantages, Disadvantages

Under Decentralized filing system, filing is done in each individual department independently. In other words, each department makes its own arrangements for filing, install separate equipment and the department staff themselves will look after this work. Therefore, filing equipment are installed in each and every department. Hence, it is also known as department filing.

Merits of Decentralized Filing

1. This system ensures secrecy of documents and enables the individual departments to carry on their work independently and effectively.

2. This system saves time. If any document is needed, it can be made available promptly without any delay. This ensures quick action.

3. Specialized knowledge about the concerned departments will eliminate the chances for misfiling. Thus safety of papers is ensured.

4. Since the papers are located within the same department they can be obtained at any time. The staff members need not go to the central filing section and get the required file. Reference is thus easy and quicker.

5. If various departments are geographically dispersed, departmental filing alone is suitable and economical.

6. The department staff normally does the filing work themselves. Hence, additional costs for appointing specialized staff for the filing department is avoided.

7. When chances for misfiling are more in the centralized filing system, decentralized filing is the only remedy.

8. The juniors will get sufficient training. In case of emergency, they can be transferred to the central filing department.

Demerits of Decentralized Filing

1. No standardized procedure shall be followed throughout the organization. The filing equipment will not also be standardized. Consequently, confusion will prevail in the office. The receiving clerk shall find it inconvenient in sorting out the incoming mail.

2. Additional space and equipment should be provided in each functional department. This factor will increase the cost of filing operations.

3. When a paper or document is concerned with more than one department, copies of such documents should be taken out and sent to various departments. This will result in unnecessary duplication of work.

4. Advantages of specialization are not possible in a decentralized filing system. Usually, one or two staff members in each department will look after this work besides their original work. Since it is an additional workload, they will not perform filing operations effectively.

5. There will be no uniformity in filing procedure. Each department. will adopt its own procedure, which may be totally different to that of another.

6. Departmental filing lacks supervision. Therefore, control of filing becomes a difficult process. Co-ordination will also become difficult.

7. Specialist filing staff cannot be appointed in each department due to the additional cost involved.

8. Under decentralized filing system, movement of files cannot be controlled. This in turn leads to files being mislaid and difficulty in locating files quickly.


From the above discussion it is clear that none of the system is free from defects. Therefore, a clear-cut choice of a filing system is very difficult to make.

The proponents of a centralized filing system claims that all office services in which filing plays an important part lends themselves to centralization. They argue that in most modem offices, mail handling and other communication services are invariably centralized and audio typists are employed. Many offices have a copy room or print room offering a centralized service for copying and duplicating. As such they conclude that centralization is desirable in most modem offices.

On the other hand, it should also be noted that complete centralization is neither possible nor desirable for all office situations. For documents, which are regularly needed in departments centralized filing is totally impracticable.

Therefore, a hybrid system should be adopted i.e. a centralized cum decentralized system is suitable for all offices. In such a system, records, which are frequently needed in departments, should be kept in the concerned department itself. General records, on the other hand, may be kept in the central filing system.