Data Security in Online Bookkeeping Services

Are you unable to outsource even in this tech-savvy world where outsourcing is prevalent?

The most common reason is data safety; you are unsure whether the company they outsource will supply high-quality work or whether they will adhere to deadlines. You can have a variety of other reasons, but data security is certainly one of them.

What kind of security are we talking about? Let’s start with some real-world examples. Following are the top three cyberattacks that happened in the accounting sector:

1. Ransomware Hit at BST & Co.
In December 2020, BST & Co. was struck by a massive ransomware attack. Because of a virus, the company's systems were compromised, and sensitive files could not be accessed. Despite the quick restoration of the systems, the harm had already been done. The virus compromised data belonging to some of the firm's clients, including names, billing codes, and insurance information.

2. Ransomware Attack at MNP.
In 2020, MNP, a prominent Canadian accounting firm, was forced to shut down after a ransomware attack affected 80 of its offices, which remained closed for a week. Because all work had to stop and all employee devices were secured prior to going online, the incident resulted in thousands of dollars in losses.

3. Spyware Attack on Chinese Tax Software.
The compromise of several Chinese tax software versions used by clients in July 2020 resulted in cybercrime. The clients included businesses from the USA with links to the US defense sector. The malware was used to gain access to company networks and data. This incident proved that even accounting tools are vulnerable to cybercrime, and resilience is necessary. As a result, the common notion that your data can only be safeguarded using accounting tools in-house is no longer true!

How Can Online Bookkeeping Service Providers Safeguard Data?

Outsourcing firms like us are making data protection their highest priority in order to maintain their customers for a long time. As a result, clients can outsource their bookkeeping operations without difficulty.

Following are the reasons why your data is secure with online bookkeeping service providers like us.

1. Data Handling on Cloud Servers

Moving to the cloud can provide numerous benefits, one of which is data security. We make sure our customer’s information is safe; if it were on our local system, it might be stolen, lost, or accidentally deleted.

Instead, data is stored on secure servers, and all application functions happen off-site. It not only reduces our business’ IT costs, but it guarantees that we’ll always have the most secure version of the software.

Cloud accounting may be used in a wide range of applications, from ERP to accounting to expense reporting using various accounting software. Online bookkeeping services providers like IBN Technologies uses those accounting tools to back up data, ensure its safety, and make updates automatically, and there’s nothing for a firm to download or install to generate it.

2. Data Encryption and Password Policy

Another benefit of choosing online bookkeeping services is that your data remains encrypted and secure with powerful data encryption and password policies.

Data Encryption - It is vital to safeguard sensitive information, whether it is in transit or at rest. Strong encryption ensures that outside eyes cannot see the data. Hence, we accept nothing other than HTTPS connections for data in transit. To reduce the likelihood that sensitive data is exposed when it is stored, we don't keep data that is longer needed. When sensitive data is stored, we encrypt it and hash the passwords.

Password Policy - Having strong password policies is critical to data security. With strict password policy requirements in terms of length, complexity, and unpredictability, passwords are the first line of defense. Regularly changing passwords is also there.

3. Limit Client Data Access

When considering online bookkeeping services, the first thing we have in our mind is whether or not the information about every client at our firm is accessible to everyone. Despite the fact that our employees don’t have ill intentions, some new employees might not be unable to follow best practices. Hence, we restrict data access to only those who need it and minimize a large number of security risks.

4. Use a Password Management Tool

Using the same password for everything or having numerous weak passwords can put your data at risk. Every time you or even our employees need to log in, they create a unique password AND use one that is strong.

When you outsource your online bookkeeping services to us, we strengthen passwords by adding special characters, using passphrases, and avoiding those that contain personal data. But how can you keep track of all your passwords if they’re all tough to remember?

A password manager might help here. A password manager stores all the passwords and assists our employees in creating secure, unique passwords.

5. Have No Room for Data on the Local Database

Stating again, it’s important to keep in mind that locally storing critical data comes with its own share of risks, including data theft, accidental data loss, unauthorized physical or virtual access, and other issues.

One method to protect our clients’ data from these risks is to store it in the cloud with services like Dropbox or Google Drive, which are cost-effective solutions for automated data backup. 

We make regular backups to an alternative physical location as well. The most crucial element in both cases is to ensure that we’re able to recover the data. Although we might protect the data stored on our local or personal computers using passwords, we’ll not be able to protect it against someone with physical access to the machine’s hard drive, and we know it.

It is crucial to protect a client’s confidential financial data to maintain reputation as an accountant. Brighton hospital was fined £325,000 after highly sensitive personal data belonging to tens of thousands of people were discovered on discarded hard drives sold on eBay.

It is possible to protect against this by keeping as little data on the physical device as possible since what is not stored cannot be stolen. Using a Whole Disk Encryption (WDE) (for example, Bitlocker for Windows, Filevault for MacOS, or Symantec for enterprise-wide security) ensures adequate data protection if the device is lost or stolen. To safeguard against malware and virus attacks, antivirus and anti-malware software are crucial.

6. Obtain Necessary Certifications

Cyber Essentials - The Cyber Essentials certification provides a starting point for cyber-security by identifying key technical security controls. Access control, patch management, and malware protection are the focus of the Cyber Essentials program, which consists of five technical controls: access control, secure configuration, boundary firewalls, internet gateways, and patch management. All online bookkeeping service providers should adopt this measure to defend against nearly all internet-based threats. This program covers data, programs, computer servers, and other aspects of the IT infrastructure.

ISO 27001 - The Information Security Management System (ISMS) standards include 114 security controls for people, processes, and technology to safeguard information assets. These standards are used to maintain the security of financial information, intellectual property, employee information, and other information entrusted to the firm by external parties, as well as other information assets.

By certifying that standards recommendations are followed, companies like us can reassure clients that top-notch security standards have been followed.

ISO 27001 and Cyber Essentials complement each other in that Cyber Essentials identifies that the fundamental safeguards are in place, while ISO 27001 stresses the importance of sophistication and maturity of the controls throughout the company.

7. Shred Data on a Regular Basis

When it comes to online bookkeeping services, it is crucial to follow certain protocols when disposing of data since “absent is soon forgotten” does not apply in this situation. When data is thrown in the bin, anyone can access it.

Therefore, data should be appropriately handled. Data should be disposed of on a regular basis, and data that is no longer required should be deleted. The paper should be shredded using a paper shredder to destroy data on paper formats. Electronic data should be eliminated or obliterated.

These are the key data security practices for online bookkeeping service providers. But, given the dawn of remote working, there are several other aspects of security accounting firms like us to consider.

Keeping Client’s Data Secure on WFH or Anywhere

Following are the best practices we follow to secure our client’s data while our workforce work from just anywhere:

8. Multi-Factor Authentication

A PIN or OTP is used to verify your login request when you log in to your online bank account. MFA, aka multi-factor authentication, secures your accounts by verifying your login request with an OTP or PIN. So, when you log into your net bank account using a PIN sent to your mobile phone, you’re using MFA.

Using MFA email accounts and client logins can add an extra layer of protection and prevent any unauthorized entry. Most login services include MFA as an integrated feature. Before we activate MFA, we first access the settings and look for MFA/2FA or authentication options. We do this for all of our remote employees, whether they are accountants or salespeople.

9. Enable VPN

Virtual Private Networks (VPNs) are like impenetrable tunnels that shield our clients’ data from prying eyes. Using a VPN to encrypt data exchanged over the internet can help secure networks and clients’ financial information.

Using a VPN, your data is scrambled and then relayed through numerous remote servers in order to conceal your IP address. Because of this, cybercriminals cannot decipher your data or gain access to your network.

It’s crucial for accounting teams to utilize a paid and dependable VPN service. Free solutions do not promise anything, and they might even come with a substantial amount of danger. We have a programmer for tech support, data protection, and data loss prevention setup.

10. Provide Security Training to Employees

Human error is one of the largest contributors to data loss and breaches. A single employee could click on a phishing link and jeopardize the entire enterprise. Therefore, we begin by educating our employees.

Accountants should learn how to properly safeguard their accounts and maintain online security. They should also be educated on the most effective cybersecurity practices. Avoiding trick emails and other traps is crucial.

We work with cybersecurity firms to implement training to provide digital and digestible training.

Data Security in Online Bookkeeping is not a Hassle with IBN Technologies

Your data is either stored in a filing cabinet or in the cloud, and we know that you count on us to keep it safe and secure. Data protection is not difficult as long as a small accounting and bookkeeping service provider adhere to some basic guidelines for storing, accessing, and protecting information. The likelihood of data theft at our virtual accounting firm is thus reduced.

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