Paperwork is the thorn in my side, too, when it comes to clutter. I've said several times before on the forum that we have a totally electronic filing system, keeping originals only of birth certificates and other legal documents.
I used to recommend Papermaster Pro, but unfortunately it's no longer being supported, and the .efx file format is not so useful.
I've now changed to just scanning everything and putting it in a file structure on my hard drive. I have a particular format for naming scanned files so that I can find them fairly easily; every file starts with "yyyymmdd", so that when I sort by filename, the files are also filed chronologically. Next comes a few key words which will enable me to find that file.
eg
"20110322 CW VISA" - statement for our Commbank VISA card of 22nd March 2011.
"20110410 Tim's term 1 school report"
"20110320 Matiz registration renewal"
etc
To replace Papermaster Pro, I'm trialling some simple, elegant, freeware called
Tagged Frog, which allows you to add tags to any kind of file (including pdfs, which is one of the harder file formats to tag). I'm really not sure yet whether I need it, or whether my file naming system alone is sufficient.
The benefit of tagging is that you can add tags which group things in multiple ways, eg add a "statements" tag to all account statements, and then you can easily find all statements between two dates - handy for mortgage applications. Or tag everything relating to one institution, or one property, or business vs personal, etc.
Then after it's scanned and backed up (offsite), all the paper goes into my new
auto-feed shredder. What I love about it is that you can put in up to 100 sheets and walk away, and it'll feed them through a few at a time while you do something else, instead of having to stand there and feed the paper yourself. It takes a while to shred, and admittedly sometimes stops feeding and needs a "nudge", but it still saves me a lot of time.