By guest blogger – Ella Watson.
Data is one of the most valuable commodities today. Aside from being used by companies as basis for all kinds of business strategies, it is also what powers most of today’s transformative technologies, such as artificial intelligence, automation tools, and analytics. With big data’s growing importance, several strategic processes in tech savvy companies are now spearheaded by data-driven tools.
Data is improving the efficiency of services in finance departments and global organizations. For instance, a company’s entire accounting information can now be stored online and accessed safely and conveniently in what is known as the “cloud.” Cloud accounting brings about many advantages, including easy and remote access for CPAs, more accurate records, integration with other services, and protection from internal fraud. A quick look at CPA Gold’s list of ‘10 Worst Corporate Accounting Scandals of All Time’ will tell you that many businesses have lost billions of dollars because of fraud cases alone. Through its automation and greater team transparency features, cloud accounting effectively reduces the risks of this sort of threat.
However, cloud-based software can still come with its own set of risks. Sensitive data may still be vulnerable to cyber attacks, especially if there aren’t robust security measures in place. So what can you do to keep your accounting data safe?
For starters, make sure to establish multiple passwords for different accounts. Unsuspecting companies and their employees often make the mistake of using just one password for multiple accounts, and this is a practice that is best avoided. If hackers get a hold of that common password, then all of your data may be doomed. As a best practice, each account should feature a different password. An article on Gizmodo also recommends composing passwords that aren’t necessarily related to you or your company. The ideal options are those with random word combinations mixed with special characters and capitalizations that don’t follow specific patterns.
Companies looking to transition to the cloud should also look for providers that have multiple data centers and servers in remote locations. This is because servers may, at times, experience crashes, and this can result in data loss. If something unfortunate ever happens to one data center, at least the remaining data centers still have your backed up information.
Common security measures are aimed at controlling users’ access to the data. Encryption adds an extra layer of security by placing restrictions on the data itself. If data is encrypted, it won’t matter how or where it was accessed. 256-bit SSL encryption is often recommended, since it is a key made up of 256 binaries. The only way to crack such key is to do trial and error, wherein the hacker would have to try an unbelievably large number of possible combinations before arriving at the right one.
Most cloud accounting platforms actually come with various security features. However, it is still up to the company to determine what features would best suit their needs and required level of data security. Accounting Today iterates that choosing the right cloud vendors and security policies are key to making a successful transition to the cloud.
• Training: Instead of solely placing your cyber security in the hands of third-party providers, it’s best to also have experts internally. Fortunately, employees can obtain degrees on cyber security in a short span of time. For instance, the cyber security course at Maryville University lets students graduate in just 2.5 years, and the classes are held entirely online. The program includes case studies on the globally documented cyber attacks for them to analyze. Convenient options like this make it easy for companies to invest in cyber security training.
• Assigned Personnel: Cloud security management should not be handled by a single person. There should be an assigned backup person in case the other one leaves the business. If any of these security personnel leave, make sure to block off their access to the company’s cloud data.
Local or Cloud
Some businesses are understandably wary of switching to cloud accounting. However, local or traditional accounting storage actually poses even more risks for your company and its accounting data. For instance, there is no redundancy, meaning data is stored on a single computer that may be subject to viruses or ransomware. On top of facing data security threats, you would also need to be worried about physical risks. If the computer housing all that valuable information gets stolen, disasters in the business will immediately ensue. In this way, cloud accounting offers a more efficient and cheaper means to store sensitive company data, which is why many businesses have already made the switch.
Ella Watson is an information security analyst by day and writer by night, with a passion for helping others adapt to rapidly changing times. In her free time, Ella enjoys tennis and discovering hidden gems in Brooklyn.