Accounting Data Security 101 on Data Privacy Day

Rahul Maingi

By Rahul Maingi, Jan 2, 2020

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Ever since January 28 was declared Data Privacy Day by the European Union, its purpose has been to inspire and inform the uninformed about the fate of their personal information. Data security is something even the largest firms struggle with. For small businesses, it can get even more difficult due to limited sources. We have already discussed the importance of keeping your accounting data secure. Someone with bad intentions can steal a client’s life and identity with the help of their social insurance number, bank account numbers or other private information. Even if a sender mistypes their e-mail address, information can get mixed up. However, accounting firms have evolved over the last two decades and are trying to protect their customers’ data at any cost.

Keeping Your Accounting Data Secure

Over the years, with regulations like General Data Regulation Protection (GDPR) and high-profile data breaches making it into headlines, businesses are now bound to comply with data privacy laws. That means making sure their proprietary and consumer data are secured at all costs. For any business it’s natural to possess information about their clients and customers, but they need to ensure that its privacy is protected. This becomes crucial for a small business in order to maintain its reputation and long-term customer relations.

As an entrepreneur, there are steps you can take to ensure that your business and customers remain safe from data breaches. These include enabling encryption on client data and using email only as a last resort to send sensitive information.

· Data Encryption

Taking data encryption seriously is a necessity when you’re trying to protect valuable accounting data. With cloud-based systems, you need to make sure that encryption is applied to everything in the cloud, including all forms of communication between you and your clients.

Encryption is standard operating procedure but many find it complicated. Still, it’s the best way to stop your data from getting hacked.

· Data Backup

As much as it may sound counterintuitive to the concept of security, having a backup stored securely over a private or public network can actually prevent a data breach. There are additional fees to avail yourself of this service, but storing your info on an off-site server is one of the best methods.

· Physical Security

It’s important for small businesses to safeguard their computer systems against theft. Make sure cables connected to accounting-dedicated computers are safe and are kept, along with the switches, in a locked setup. For wireless connections, you must follow security protocols, as wireless systems are easier to hack than wired ones. For laptops, make sure you have real-time tracking software.

· Authentication

All systems must have login IDs and passwords to ensure user authentication. This limits the chances of an unauthorized person using the computer. However, you need to also forbid employees and customers from sharing their private information.

The purpose of authentication is to grant right of access only to a particular user. This will limit the number of users accessing that information. For instance, some users may have access to the accounts payable module while others may only access the reports. This can greatly decrease the risk of data misuse.

· Using Cloud Storage

Cloud-based accounting software is the future for keeping your valuable accounting data organized. However, depending solely on its default security measures is not enough. No matter how good the software you choose is, as a business owner your personal involvement will always play a big role in the safety of your data.

When using cloud storage, therefore, ask the service provider if they have multiple data centres in undisclosed locations. Physical security measures, daily data backup, encryption and limiting access by authentication will also be needed, as previously mentioned.

· Making Staff More Efficient

The internet is an ever-changing place and your systems need to evolve along with it. Hackers are now targeting tasks with human involvement daily with phishing and spear phishing scams. Therefore, you need to train your staff to follow robust security protocols at all times.

This is a very important matter in securing data in 2020. The aim of this coming Data Privacy Day is to create a perfect harmony where automated solutions and efficient employees work together. In the words of James Markarian, the CTO of SnapLogic, a US-based commercial software company specializing in SaaS, iPaaS and on-premises business software applications, “As technology is further democratized and data-savvy users acquire, access, and use a multitude of apps and systems themselves, often without IT assistance, we’re going to see continued growth of workers adopting self-service, low-code, AI-powered technology solutions to boost productivity, augment capability, and accelerate day-to-day work results.”

When a data breach happens, it doesn’t just mean a loss of data and money but also reputation. As technology advances daily, accountants need to keep up to date with the latest security updates and protocols. Data breaches are big nightmares for any business, and the best practice is to treat every day as Data Privacy Day when it comes to protecting accounting data.

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