Organizing files involves choosing between a single centralized folder or multiple specialized folders. Using one big folder simplifies initial setup—all files live together without complex hierarchies. Conversely, many small folders create structure through categorization, grouping files logically by project, topic, date, or type. The key difference lies in navigation ease versus search efficiency; a flat structure reduces folder diving but may slow finding specific items later, while nested folders add clicks upfront but improve targeted access.

For instance, storing all invoices undifferentiated in a single "Finances" folder might suffice for very low volume. However, subfolders by year and vendor become essential as volume grows—common in accounting or project documentation. Similarly, developers almost always organize codebases into numerous directories reflecting features (e.g., /src/components, /tests), as do researchers managing datasets split by experiment variables or time periods.

A flat structure minimizes planning overhead but scales poorly, leading to overwhelming lists that hinder finding files. Structured folders improve discoverability long-term but can suffer from over-segmentation if categories overlap or definitions shift. Finding balance is crucial: prioritize intuitive grouping aligned to usage patterns and supplement with search features/tags. Future tools increasingly favor metadata tagging over rigid hierarchies, offering flexible organization without excessive nesting while maintaining context.