Based on experience with successful implementation of an on-line computerized psychiatric case record system in a psychiatric hospital in Israel, the authors discuss the advantages of such systems and outline the process of converting paper records to computerized records. Computerized records can save time by automatically issuing routine reports, improve clinical practice, simplify quality assurance, and ease collection and analysis of data for research. The process of converting paper records to computerized records can begin with analysis of the hospital's reporting requirements and creation and pilot testing of structured paper forms with a multiple-choice format that is eventually incorporated into the computer program. The authors recommend an on-line computerized record system with direct input of data because such a system can be used for case audits and can generate reports, treatment plans, and medication orders without removing records from circulation. Other advantages include the system's usefulness in electronic communication within and outside the hospital.