SharePoint Document Set vs Folder: Which One Should You Use?

If you’ve spent any time managing documents in SharePoint, you’ve probably asked yourself: Should I use a folder or a document set here? On the surface, they both seem to do the same thing — group documents together. But once you dig deeper, you’ll realize they’re quite different and built for different situations.

In this tutorial, I’ll walk you through SharePoint Document Set vs Folder, exactly what each one does, how they compare, when to use which, and how to set up document sets step by step.

What Is a SharePoint Folder?

A folder in SharePoint works just like a folder on your desktop. You create it, drag files in, and use it to keep things organized. It’s simple, familiar, and requires zero configuration.

Most teams default to folders because they’re intuitive. Everyone knows what a folder is. You don’t need training to use one.

But here’s the problem — folders break down fast once your document library grows.

The real limitations of SharePoint folders:

• Metadata doesn’t apply at the folder level. If you want to tag documents by department, project name, or status, you have to do it file by file.
• Filters in SharePoint views only work within the folder you’re currently in — not across the whole library. So if you’re looking for all “Draft” documents across five folders, good luck.
• Deep folder hierarchies become a navigation nightmare. Users end up clicking through four or five levels just to find one file.
• You can’t associate a workflow with an entire folder. Automation applies to individual files, not the container.

Folders are great for small, simple scenarios — say, a team of three people sharing a handful of files. But for anything complex, they quickly become a liability.

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What Is a SharePoint Document Set?

A document set in SharePoint is essentially a supercharged folder. Technically speaking, it’s a special content type in SharePoint that lets you group related documents together and treat them as a single unit.

Here’s what makes it different from a folder:

• You can apply shared metadata at the document set level, and that metadata flows down to every document inside it automatically.
• It has its own welcome page — a customizable landing page you can use to display key properties, links, and instructions for anyone opening it.
• You can kick off a workflow on the entire document set, not just individual files.
• Version history is tracked at the set level, so you can see how the entire collection evolved over time.
• You can pre-load document templates into a document set, so every time someone creates a new one, the right starter documents are already there.

Think of it this way: a folder is a plain cardboard box. A document set is a labeled binder with dividers, a cover page, and a tracking sheet attached to the front.

A Real-World Example to Understand Folders Vs SharePoint Document Sets

Let me give you a concrete scenario. Say your legal team manages client contracts. Each contract involves multiple documents: the draft agreement, the signed PDF, the supporting compliance forms, and the renewal notice.

With folders, you’d create a folder called “Client A – Contract 2026” and dump all those files in. If someone later asks, “Show me all contracts that expire in Q2,” you’re stuck manually opening folders one by one.

With a document set, you create one document set for each contract. You attach metadata fields to it — client name, contract value, expiry date, status. Now you can build a filtered view in your library that shows every contract expiring in Q2, sorted by value. You can trigger a Power Automate flow to send reminders before the renewal date. And every document inside inherits the client name automatically — no manual tagging needed.

That’s the difference. Folders organize. Document sets manage.

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Feature Comparison

Feature	Folder	Document Set
Metadata at container level	Not supported	Yes, shared across all docs
Custom welcome/landing page	No	Fully customizable
Version history	Per individual file	For the entire set as one unit
Workflow / automation	Per individual file	On the entire set
Pre-loaded document templates	No	Yes
Search and filtering	Limited (within folder only)	Full library-wide filtering via metadata
Setup complexity	Very easy	Moderate (needs activation)
Best for	Simple, small-scale grouping	Project files, cases, contracts, campaigns

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Comparing Features of SharePoint Folders and Document Sets

Metadata and Content Types

One of the key advantages of document sets in SharePoint is their ability to share common metadata. When you create a document set, you can assign shared metadata, which is automatically applied to all documents within the set. This ensures consistency and makes it easier to search and retrieve content.

SharePoint Folders, in contrast, cannot share metadata across contained documents. Each file within a folder can have its own metadata, but there’s no simple way to enforce consistency without manually updating each item.

Versioning and Workflows

Document sets in SharePoint support versioning for the entire set, meaning you can track and restore changes to the entire collection of documents as a single unit. This is particularly useful when multiple documents are part of a larger process or project.

Folders in SharePoint do not have this capability; versioning in folders applies to individual files rather than the folder as a whole. Workflows can be associated with document sets, allowing for more complex business processes to be automated and applied to the entire set.

Navigation and User Experience

Document sets provide a more streamlined user experience, as they display all the documents in a set within a single view. This can be customized to show important metadata and provide quick access to the documents’ content.

With folders, navigation can become more complex, especially with deep folder hierarchies. Users may have to click through multiple levels to find the documents they need, which can be time-consuming.

When Should You Use a Folder in SharePoint?

Folders still have their place. I’d recommend sticking with folders when:

• You’re organizing a small number of files without any metadata requirements
• Your team is not technically inclined and needs the simplest possible structure
• You just need quick, temporary grouping with no automation or reporting needs
• You’re managing files that don’t belong to any repeatable business process

For example, a team storing meeting agendas and notes for a one-off project can get away with a folder. No need to overcomplicate it.

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When Should You Use a SharePoint Document Set?

Go with document sets when:

• You’re managing a repeating type of work — like contracts, cases, projects, or campaigns — where the same set of documents gets produced each time
• You need consistent metadata applied across all documents in the group
• You want to trigger an automated workflow on the whole group — such as sending an approval request or a reminder email
• You need to filter and report on the entire group as one unit (e.g., “Show all open cases assigned to John”)
• Your team works with regulatory or compliance documents that need to be versioned and audited together

Some common real-world use cases I’ve seen document sets used for:

• Legal firms: One document set per client case, with all pleadings, evidence, and correspondence inside
• HR teams: One document set per employee onboarding, with contracts, ID verification, and training records
• Project teams: One document set per project phase, with specs, plans, and sign-off sheets
• Insurance companies: One document set per claim, with forms, photos, and assessment reports

Read Create Folders and Subfolders in SharePoint document library

How to Set Up Document Sets in SharePoint (Step by Step)

Before you can use document sets, you need to activate the feature at the site collection level. Here’s exactly how to do it.

Step 1: Activate the Document Sets Feature

1. Open your SharePoint site
2. Click the Settings gear icon (top right) → select Site Settings
3. Under Site Collection Administration, click Site collection features
4. Scroll to find Document Sets and click Activate

Here is a screenshot for your reference:

That’s it for activation. Now the content type becomes available across the site collection.

Step 2: Enable Content Types on Your Library

1. Open the document library where you want to use document sets
2. Click Settings → Library settings
3. Under General Settings, click Advanced settings
4. Under the Content Types section, select Yes to allow management of content types
5. Click OK to save. You can see the screenshot for your reference.

Step 3: Add the Document Set Content Type

1. Back in Library settings, scroll down to the Content Types section
2. Click Add from existing site content types like below screenshot:

3. In the dropdown, select Document Set Content Types from the “Select site content types from” list
4. Select Document Set and click Add, then click OK. Here is a screenshot for your reference.

Step 4: Create a Document Set

1. Open the document library
2. Click New in the command bar — you should now see Document Set as an option

3. Click it, give the document set a Name and Description, then click Save.

Your document set now appears in the SharePoint document library. Click on it to see the welcome page, where you can view all its properties, edit metadata, and start adding documents. You can see the screenshot below:

Step 5: Add Documents to the Set

Inside the document set, you can:

• Click Upload to add existing files
• Click New to create a new document from a template
• Drag and drop files directly into it

Any metadata you’ve assigned at the document set level (like project name or status) will be automatically applied to all files you add.

The Welcome Page

The document set welcome page is very useful. You can customize it to display key metadata fields, a list of documents in the set, links to related resources, and instructions for your team.

For example, if you’re using document sets for onboarding, the welcome page for each new hire’s document set could show their name, start date, department, status, and a checklist of what still needs to be uploaded. It becomes a self-contained hub for that specific record.

To customize the welcome page, open the document set, click Edit (or in classic view, click Edit Welcome Page), and customize it using web parts just like any other SharePoint page.

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Can You Use Folders Inside a Document Set?

Yes, you can create folders inside a document set for further organization. This works well when a document set has a large volume of files that need subcategories — like separating “Legal Documents” from “Financial Documents” within the same project set.

That said, use this sparingly. If you find yourself building deep nested structures inside document sets, it might be a sign that the metadata isn’t being fully utilized. A well-tagged flat structure is almost always easier to search and filter than a folder tree.

For Modern SharePoint

Document sets work in both classic and modern SharePoint. In modern SharePoint Online, the welcome page is built on the modern page framework, so it looks clean and responsive.

One thing to watch: in modern SharePoint, filters in views work much better with metadata than with folders. If you’re on SharePoint Online and struggling with filtering across folders, document sets with metadata columns are the better long-term architecture. The modern experience is built around metadata-first navigation.

Conclusion

So there you have it — folders and document sets both have their place in SharePoint, but they solve different problems.

If you’re managing a small set of files with no real structure needed, a folder gets the job done. But if you’re dealing with recurring work — contracts, projects, HR records, legal cases — document sets are genuinely worth the extra setup time. The ability to share metadata, trigger workflows, and filter across your entire library as a unit changes how your team works with documents.

I’ve seen teams stick with folders out of habit, then spend hours hunting for files or manually re-tagging documents. Once they switch to document sets for the right use cases, they wonder why they waited so long.

Start small — pick one repeating process in your team, set up a document set for it, and see how it feels. Once it clicks, you’ll naturally start applying it everywhere it makes sense.

If you’re still unsure which to use, run through this quick checklist:

Use a Folder if:

• Simple grouping with no metadata needed
• Small team, small number of files
• No automation or reporting required

Use a Document Set if:

• You manage a repeating type of work (projects, contracts, cases)
• You need shared metadata across related documents
• You want filtering, views, or workflows on the group
• Compliance or audit trail matters

If you have any questions or run into issues setting it up, drop a comment below — I’m happy to help!

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