I am currently finishing a novel that I started in and imported from a different software package. All of the resultant chapters, of which there are more than 50, are included under one folder. Will this setup create any problems when the manuscript is eventually compiled into one single document or will it be necessary to go back and place each text file/chapter into a separate folder?
Thank you in advance.

When Scrivener compiles the document in standard mode, it essentially ignores hierarchy (this will change in the future, but in a way which can be ignored if not desired). Rather the more important factor, if you need it, is type. Take a look at the compile options (Cmd-Opt-E). In the first tab you can designated folders, documents, and stacks of documents to act in different ways. Also, in the third tab you can assign different title font styles for each of the three, if titles are generated. Other than these two components, it doesn’t matter if you have a 23-level deep fork at the top mixed with a flat list of documents at the end, it will all come out as a flat document. Thus, the way you organise your Binder is entirely up to you. It’s an author’s tool. This is augmented by the fact that type does not dictate how you organise things. Unlike the Finder, folders can act just like text files, and text files can contain other text files as if they were folders (which is the third “stack” type). So you have much more flexibility. If it is your desire to title each section, there is no need to use folders to do that, you can simply turn on titling for the document type. Also note you can convert items from folders to documents and vice versa.

The main exception to this is MMD. If you use that system then, depth does matter. Scrivener will assign header syntax depth depending on Binder depth. And as said at the top, in the future depth can be utilised if you wish, for more complex compiling needs.

Short answer: the way you have things right now will work just fine, however in time you’ll probably want to make use of the Binder’s organisational methods as you get used to Scrivener’s philosophy of small chunks of text. Scrivener makes very few demands on how you work, stressing flexibility and writer’s comfort over enforcing protocols with folders and such. In general, the answer is, don’t worry about it. It isn’t always true, but due to the ability to convert between types, and the looseness between the definition of a folder and a document, there generally isn’t anything that will come back to bite you later on.

Thank you for your informative response.