How to prepare a Design Document and what are the procedure

A design document is a way for you to communicate to others what your design decisions are and why your decisions are good decisions.

you  should cover below points in this documents
Introduction
System Overview
System Architecture
Data Design
Component Design
Human Interface Design
Requirements
and
Appendices


you can also check below links
http://www.toptal.com/freelance/why-design-documents-matter

http://cmsu2.ucmo.edu/public/classes/sam/Advanced%20Systems%20Project/sdd_template.pdf

https://www.cs.drexel.edu/~dpn52/Therawii/design.pdf

https://www.udemy.com/blog/software-design-document-template/

I prepare design document sometime w.r.t. audience. By this I mean will you present to manager, developer. Anyway, generally it contains following components:

• the purpose of your project/sub-system
• Define the high level entities in your design, e.g, ER diagram, Architecture diagram
• For each entity, define the low level design: relationships between objects and flow

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