When configuring document libraries in SharePoint that will contain folders, a good practice is to leverage the use of Content Type based folders as opposed to the standard basic folder that is enabled by default. Using a folder based on a content type provides the following benefits:
You can add metadata to the folder which will help describe it better within the library. A common type of metadata that is useful is “folder scope notes” or “may contain” which is a column that outlines the type of information that might be stored in the folder. This helps drive better compliance but also provides usability benefits to end users. Another useful metadata field might be “Folder Number” or “Sort Order” which can help with how the folders are listed when alphabetic or date based columns do not align with how you wish to sort.
You can choose where folders can be created. With content types, you can choose which content types are enabled under the New Button on specific folders. Therefore you can disable the use of folders by removing that content type on the levels you do not want it enabled. I typically do this after 1-2 levels of folders as I do not wish to have any more.
Manage View Availability!
You can select which views appear in specific folders. This allows for a very rich drill down experience by setting which views appear as a user navigates through folders. There is an administrative overhead of setting this up, but in the end, you can determine which columns appear in views as users select specific folders for navigation.
Where to Start?
To create a folder content type, simply create a new content type that inherits from the default folder Content Type. Then configure the way you would any other SharePoint content type.
Ironically, the one place this approach typically causes me pain is in areas where I wish to use the Content Organizer in a Records site. In these cases, the control that you use to identify the destination folder doesn’t play well with content type based folders.