Cloud data storage as a value-added service for small accounting firms
26 Jul 2018
Data management and backup is one of the biggest IT challenges facing small accounting and bookkeeping firms today. Lacking the big budgets of larger companies, these businesses have less to spend on data storage, backup and protection and often resort to storing files on their laptops or, at best, an external hard drive or two.
However, accounting and bookkeeping firms – no matter how small – are usually responsible for the safekeeping of confidential information, such as client financial records, invoices and account information. They are also typically required to keep this data on hand for a specific period of time, with five years being the norm.
Some businesses choose not to have a back-up at all, however this is a risky move in a business driven by accurate record keeping and reputation. If a bookkeeper’s laptop houses their only copy of a client’s data, and it is stolen, broken or infected with a virus, the damage can be catastrophic. They risk their reputation by explaining to a client that they no longer have their data and, in the unlikely event that they remain in their client’s employ, they also lose valuable time in redoing work and recapturing information. It is never wise to not have any form of backup whatsoever.
Firms always have the option of working from the clients’ premises, never removing client data from site and only working with it to carry out their task. However, this is rarely the case for any business with more than a single client, and these firms are usually given all of their client’s financial records to keep. For this reason, it is critical that these businesses look at ways to store and protect their client’s data.
External drives containing backup copies of data provide some measure of protection, especially if they are stored off-site and separately from the laptops or devices used to process the data. Unfortunately, they are not infallible, and can be misplaced, over-written or damaged, resulting in lost data.
Legislation like the Protection of Personal Information (PoPI) Act in South Africa and General Data Protection Regulation (GDPR) in the European Union, demand that third party personal information, such as the records which bookkeepers hold, be protected in accordance with the guidelines they set out; failure of which to meet these can result in severe financial penalties which small businesses are rarely able to survive.
Beyond regulatory requirements, bookkeepers and accountants need to be able to establish and maintain a credible reputation with their clients. Financial information handling is a business built on trust, therefore it’s critical that these businesses engender the trust of their clients by being able to prove their ability to appropriately protect and store the data that their clients give them.
Cloud to the rescue
Cloud backup and protection solutions enable businesses like small accounting and bookkeeping firms to cost effectively store, backup and protect their clients’ data at a monthly cost. This gives them peace of mind that the data they are working with is not only available any time, should it be required, but is also secured in accordance with regulatory requirements.
Cloud storage, backup and protection services are typically offered as a monthly service, allowing businesses to only pay for the amount of storage they need, increasing or reducing it as required. This gives them scalability and security without having to fork out large capital investments in infrastructure and security software.
Despite cloud’s relatively low-cost base and obvious benefits, small accounting and bookkeeping firms are often still hesitant, whether because they are unaware of the need to retain and protect their clients’ data, or because it’s not their core focus and, thus, considered an excessive expense.
While data storage, backup and protection may not be the main focus of these businesses, it certainly is a value-added service they can offer to their clients. Clients are more likely to want to use the services of a firm who can not only do their books, but also ensure their data is stored, secure and compliant at the same time.
Bookkeepers and accountants can offer this as an additional service, making it part of their revenue stream with little to no effort on their part, while simultaneously bolstering their reputation as a trusted service provider. There may well be clients who choose not to opt in on data storage and protection, but accounting firms can take comfort in knowing that they have, at least, made their clients aware of the dangers.