Paperwork is a byproduct generated by working on office tasks.
Generation of paperwork
You can generate paperwork passively by working on Product Tasks (Engineering, Design, Testing, Managing), or purposefully by doing the "Write documentation" task, that will reward the player with Company Experience Points.
Dealing with paperwork
After generating the paperwork the employee will leave its work station to place it on a table with a free space on it, if no table is available the worker will complain and then put it on the ground lowering its "Work quality" stat. To remedy that you can later on the game place a Printer that will handle the paperwork on a 4 tile square radius around it and will disable the need for the employee to leave its work station to store the paperwork.
After you got some paperwork you can combine them into paperwork boxes, as shown on the .gif below: