One of the most common concerns we hear about cloud accounting is:
“Is it safe to put my business accounts online?”
It is a perfectly reasonable question. Your accounting records contain sensitive information, and trusting somebody else to store them can feel less secure than keeping everything on your own computer.
In practice, however, the opposite is often true.
Is your computer really safer?
Several years ago, the hard drive in my computer failed and I lost many photographs from when our children were growing up. I thought I was protected because I had copies on two separate backup devices—but both of those failed as well.
I considered myself reasonably IT-savvy, yet my backup arrangements were not as reliable as I believed.
The same risks apply to business records. Computers and storage devices can fail, be damaged, lost or stolen. They are also vulnerable to viruses, ransomware and accidental deletion. Even where backups are being taken, they are only useful if they are current and can actually be restored.
Keeping your accounting records on your own computer may feel reassuring, but it does not necessarily make them safer.
How does cloud accounting protect your information?
With cloud accounting, your records are stored on secure systems operated by the software provider rather than relying on one computer in your home or office.
Reputable cloud accounting providers invest heavily in security, backups, encryption and monitoring. Their systems are designed to continue operating if an individual server or piece of equipment fails.
Your records can also be accessed from another device if your computer is lost or damaged. This makes it much easier to keep your business running and avoids depending on a single machine.
Is the cloud completely secure?
No system is completely secure, including the computer sitting on your desk.
The biggest risks often come from weak or reused passwords, stolen login details and people being given more access than they need. That is why it is important to:
- use a strong, unique password;
- turn on multi-factor authentication;
- keep computers and phones up to date;
- review who has access to your accounting records; and
- be cautious about unexpected emails and requests for login details.
These are relatively simple precautions, but they make a considerable difference.
So, should you trust cloud accounting?
For most small businesses, a reputable and properly managed cloud accounting system is likely to be safer and more resilient than keeping the only working copy of the records on one computer.
It also brings practical benefits. You and your accountant can work from the same up-to-date information, records can be accessed securely from different locations, and problems can often be identified much sooner.
Choosing the right software and setting it up correctly are important. We work with several leading cloud accounting systems and can help you select an appropriate package, transfer your records and establish sensible access controls.
If concerns about security are holding you back from cloud accounting, talk to us. We will explain the options clearly and help you decide what is right for your business.