The best way to manage files in a library is to keep it as flat as
possible. I.e. do not use folders to organize documents. SharePoint
is a database, which means you can store more items in less buckets
(libraries) and tag them properly so you can create views that filter
on the tags you have created.
Using folders makes the users drill to find something rather than
allow SharePoint filter based on the metadata you build in.
If you use your folder structure as a guide to creating metadata
tags, you can easily accomplish this but you must think in terms of
data retrieval and not document storage; a big difference.
Say you wanted to group financial document by quarter. Normally you
would create a folder for each quarter then store your documents in
each folder making users drill and search to find them. If you create
a choice column in your library called Quarter, then place Qtr 1, Qtr
2, etc. as choices, you can then create views (queries) based on
those metadata fields. This allows you to group and filter your
documents based on the choices made during upload.
You can have literally hundreds of documents in a library and if they
are properly tagged, you will never need a folder. You simply create
the views you need based on the metadata you create. Much easier for
the users to find things this way. A document can also look as though
it lives in more than one place at a time by the way the views are
built. Something you can't do with folders.