One of the worries many small businesses have about cloud accounting is cloud security. It’s a reasonable question to ask in a world of identity theft and hackers. And with GDPR on everyone’s mind, we thought it would be a good opportunity to revisit the issue of data protection, cloud security and security in general. The cloud accounting software that we partner with, Xero, is incredibly secure. They have made safeguarding the centre of their entire product. But more of that in a bit. First the question to ask yourself is;
How secure is the alternative?
Most small businesses have already switched to cloud accounting, if not they are saving all their data locally. So, let’s take a look at the safety issues around local security.
Any computer can be lost, stolen or destroyed, so keeping your data that way is very risky. Equally any back up (which quickly go out of date) is only as safe your safeguarding policy makes it. If your computer is destroyed in an office fire, your back up will only help you as long as it was stored safely offsite. Human error is also a major threat, an employee may leave a laptop in an unlocked car, or you might get off the train without your tablet.
Cloud accounting, on the other hand, is probably the safest way to keep your accounting data. With software like Xero, your data is stored in huge data storage centres, managed 24 hours a day. In addition, multiple back-ups are made, in geographically diverse locations. Encrypted connections are used when your data travels to and from the storage centres to your laptop, mobile or whatever. This means that the data can’t be intercepted. Your data can only be accessed with a secure login and password, so nobody else can retrieve your information, if your laptop is stolen or lost. If you have to evacuate your office for any reason (fire, storm damage etc) you can be up and working within hours, as all your important data can be accessed remotely from anywhere and with any device.
We normally associate security with inconvenience (finding passwords, two-factor authentication, etc.) but with the cloud you get easier access to your data because it can be accessed from anywhere – but only by you.
Although cloud accounting is by far the safest way of storing your important data, nothing is completely risk-free.
Here are some ways to make your data even safer
- Make sure you and your team use strong passwords and never share them with anybody else.
- Consider using a password manager.
- If you haven’t already, install malware on all your computers.
- Create a Disaster Recovery plan and keep it up to date
- Educate yourself and your team to recognise phishing and other hacking methods.