It usually starts innocently enough. Someone sets up a Teams channel, uploads a few files, and within a few months every department is doing the same thing in its own channel, with no shared naming convention, no clear owner, and files scattered across a dozen "General" folders that nobody can find anything in. By the time a business has 20 or 30 staff, the SharePoint site behind Teams has quietly become an unmanageable filing cabinet with the drawers emptied onto the floor. Fixing it later is far more painful than setting it up properly from the start.
Why the default Teams folder breaks down
Every Microsoft Teams channel automatically creates a folder in a connected SharePoint document library. That's fine when you have three or four channels and a handful of users. The trouble starts when teams grow, projects multiply, and people start treating the "Files" tab as a dumping ground rather than a structured library. Common symptoms include:
- Multiple copies of the same document with slightly different file names, because nobody could find the original.
- No consistent folder hierarchy, so new starters have no idea where to look for anything.
- Permissions that have been loosened over time because it was quicker than fixing the underlying structure.
- External clients or suppliers with access to far more than they should have, simply because they were added to a whole channel rather than a specific file or folder.
None of this is a fault with Teams or SharePoint. It's what happens when a tool designed for structured collaboration is used without any structure at all.
Permissions should follow the business, not the folder
The biggest risk in an unplanned SharePoint setup is permissions sprawl. Teams inherits its permission model from the Microsoft 365 group behind it, which means anyone in a team typically has edit access to everything in that channel's library by default. That's rarely what a business actually wants once it grows beyond a small core group.
A better approach is to think about permissions in terms of roles before you think about folders:
- Decide which groups of people need read-only access versus edit access, and set this at the library or folder level rather than relying on defaults.
- Use private channels for genuinely sensitive material (HR, finance, board papers) rather than trying to lock down parts of a standard channel after the fact.
- Review guest and external access regularly. It's easy to add an external partner for one project and forget to remove them once it finishes.
Building a sensible folder structure
There's no single correct structure for every business, but a few principles hold true across most SMEs:
- Structure by function or client, not by date. A folder per client or project, with consistent sub-folders inside (contracts, correspondence, deliverables), ages far better than folders named after the month they were created.
- Keep it shallow. More than three or four levels deep and people stop navigating and start searching, which only works if files are named sensibly.
- Agree naming conventions early. Something as simple as "ClientName_DocumentType_Date" avoids the twelve-copies-of-the-same-file problem.
- Separate working documents from final versions. SharePoint's version history makes this less critical than it used to be, but a clear "Final" or "Approved" folder still helps people who aren't confident digging through version history.
Version control without the headaches
One of SharePoint's genuine strengths is built-in version history, but it only helps if people are actually using shared documents rather than emailing copies back and forth or saving duplicates to their desktop. Encourage co-authoring directly in SharePoint or Teams, switch on version history at the library level if it isn't already, and set a sensible limit on how many versions are retained so storage doesn't balloon unnecessarily. For anything that goes through a formal approval process, consider using SharePoint's check-out feature or a simple status column so everyone can see at a glance whether a document is in draft, in review, or signed off.
External sharing: the part most businesses get wrong
External sharing is where most of the real risk sits, because it's invisible day to day. Microsoft 365 makes it very easy to share a file with "anyone with the link", which is convenient right up until that link ends up forwarded somewhere it shouldn't be. Set organisation-wide sharing defaults that match your risk appetite, require authentication for external links rather than allowing anonymous access, and set expiry dates on external links as standard practice rather than an afterthought.
Getting it right before it becomes a problem
None of this requires expensive tooling. It requires a deliberate structure, sensible defaults, and someone keeping an eye on how it's being used as the business grows. The businesses that get into difficulty are almost always the ones that let Teams and SharePoint grow organically for a year or two before anyone looked at how it was actually being used. Untangling that mess later means hours of staff time moving files, re-setting permissions and chasing down who has access to what. Sorting it out now, while it's a manageable job rather than a six-month project, is far cheaper in the long run.
If your SharePoint and Teams setup has grown into something nobody fully understands any more, Valetech Solutions can review your current structure, tighten up permissions and external sharing, and put a sensible system in place that scales as your business does. Get in touch with Valetech Solutions to talk through your setup.