SharePoint vs OneDrive vs Teams: Where Should Files Live?

A few months ago a Streatham design studio called us with a familiar problem. Their office manager had left, HR had done the sensible thing and closed her account, and three weeks later nobody could find the master client contract list. It had lived in her OneDrive the whole time. When the account was deleted, the files went with it. Everyone had assumed “it’s in Microsoft 365, so it’s safe” — and in a sense it was, right up until it wasn’t.

This is the single most common Microsoft 365 muddle we see across South London and Surrey businesses. The tools all overlap, they all sync, and files end up scattered across three of them with no rule about what goes where. So let’s make it simple: what each one is genuinely for, and where your files should actually live.

The one-line version of each tool

OneDrive is your personal drawer. It’s your space, tied to your account, for your working files and drafts. Think of it as the modern replacement for the “My Documents” folder on an old office PC. Useful, private, and — this is the important bit — attached to you, not the business.

SharePoint is the shared filing cabinet. It’s where documents that belong to the business live: the ones your team needs to find, edit and keep long after any one person moves on. Departments, projects, policies, templates, client folders — anything shared belongs here.

Teams is the conversation on top of the filing cabinet. Every Teams channel quietly creates a SharePoint site behind it, so when you drop a file into a channel’s Files tab, you’re really saving it into SharePoint. Teams just wraps chat, calls and files around it so a group can work in one place.

That last point is the one that clears up most of the confusion. Teams and SharePoint are not two separate stores fighting over your files — Teams is a friendly front door onto SharePoint. There is only ever one copy.

Where each type of file belongs

Here’s the rule of thumb we give clients:

• A draft only you are working on → OneDrive. A quote you haven’t sent, a presentation half-built, notes to yourself. Once it’s ready to share, move it.
• Anything the team relies on → SharePoint (via Teams if the group already works there). Client records, finance documents, HR policies, signed contracts, shared templates. If losing it would hurt the business, it does not belong in one person’s OneDrive.
• Files tied to an active project or group chat → the relevant Teams channel. You get the file and the discussion around it side by side, and it’s still safely in SharePoint underneath.

The test is simple: if this person left tomorrow, would the business still need this file? If yes, it should never sit in personal OneDrive. That one question prevents the exact scenario the design studio walked into.

Why the distinction actually matters

This isn’t tidiness for its own sake. Getting it wrong creates three real risks.

Orphaned files. As above — anything in a leaver’s OneDrive disappears when the account is removed, unless someone deliberately transfers it first. Shared libraries belong to the business and stay put.

Broken permissions. When important documents live in personal OneDrive, sharing them means a tangle of individual “share” links. People lose access, links get forwarded to the wrong person, and nobody can see who can open what. SharePoint lets you set access by team or role once, cleanly.

No single source of truth. When the same document exists in two people’s OneDrives and a Teams channel, you get three versions and endless “which one’s the latest?” A shared library means one file, one current version, edited in place. Setting this up properly is a core part of a good Microsoft 365 setup — it’s much easier to get the structure right at the start than to untangle it later.

A quick checklist to get this right

Whether you’re setting up fresh or tidying an existing mess, work through these:

1. Agree the rule as a team. “Shared work lives in SharePoint/Teams; personal drafts live in OneDrive.” Write it down. A rule nobody knows isn’t a rule.
2. Create shared libraries by how you actually work — by department, client or project — not one giant dumping folder. Structure people understand is structure people use.
3. Move business-critical files out of personal OneDrive today. Start with the ones that would cause a crisis if their owner left.
4. Set permissions by team or role, not one link at a time. Fewer one-off shares, fewer surprises.
5. Have a proper leaver process. When someone goes, check their OneDrive for anything the business needs before the account is closed.
6. Don’t confuse sync with backup. OneDrive versioning buys you some recovery, but it is not protection against ransomware or a lost account. Pair it with a real backup and continuity plan.

The honest bottom line

Microsoft 365 gives you three tools that overlap on purpose, and left to itself a team will spread files across all three at random. A few minutes agreeing where things go — personal drafts in OneDrive, everything shared in SharePoint, with Teams as the working front door — saves hours of hunting later and protects you from the day a key person leaves.

If your files feel scattered, or you’re moving to Microsoft 365 in the cloud and want the foundations laid properly, we’re happy to help you design a structure that fits how your business actually works. No jargon, no rebuild for the sake of it — just files where you’d expect to find them, and nothing tied to an account you’re about to lose.