Archives#yourcpainthecloud Archives — C. Lynn Northrup, CPA, CPIM
Cloud accounting is as safe as internet banking which we have been doing for over fifteen years. When utilizing cloud accounting it is important to realize that you have control over who has access to your system and what they are authorized to do. It is essential to know that no one including the support staff of the software company can access your data unless you authorize it.
Standard access to your system is done through a login and a password. Some vendors such as Xero and QuickBooks Online offer the option of a two-step authentication which provides a second level of security. This reduces the risk of your account being accessed if your password is compromised. Small businesses typically don’t do a good job with security so this step helps them do a better job to ensure the security of their system.
All data entered into your cloud accounting system is encrypted using industry-standard TLS (Transport Layer Security). The data is also encrypted when it is stored on the host servers and when it is transferred between data centers.
Online accounting software vendors do an excellent job of protecting their systems and networks. They utilize multiple layers of security to protect your data including firewalls, intrusion protection systems and network segregation. In addition, they utilize industry leading security vendors to help them protect their systems against intrusion from global intelligence threats.
Software vendors are located within enterprise-grading hosting facilities that employ robust physical security controls to prevent physical access to the servers. Controls include 24/7/365 monitoring and surveillance combined with on-site security staff and regularly scheduled ongoing security audits. In addition, multiple geographic and separated data replicas and hosting environments are maintained to minimize the risk of data loss or outages.
Xero, for example, performs real-time data replication between geographically diverse and protected facilities. This is done to ensure that data is available and stored safely. So even if an entire hosting facility failed, they can quickly switch to a backup to keep Xero and your business running.
The true risk with cloud accounting systems is the people using the systems and their failure to utilize proper care when working on the internet. Scammers will try to trick people to obtain user names, passwords, credit card details, and bank account numbers. Some of the tricks that they try to get you to:
- Clicking on a link that might infect your computer with malicious software.
- Following a link to a fake, but convincing website that will steal your login details.
- Opening an attachment that will infect your computer.
The key is to be aware of these traps to steal your sensitive information and be careful not to fall for these gimmicks.
Some things to watch for that will help you avoid problems include watching out for the following indications:
- Incorrect spelling or grammar.
- The actual linked URL is different from what is displayed (hover your mouse over any links in the email to see if there are any differences.
- Emails that call for urgent action.
- Emails indicating that you have a parcel waiting that you didn’t order or promises for rewarding you for helping out.
- Changes to how information is usually presented.
- If you receive a suspicious email do not click on any link or attachment contained in the email.
- Do not reply to any suspicious emails and delete them.
You need to understand that while there are potential hazards out there on the internet, cloud accounting systems are as secure as on line banking. The biggest security risks lie with the carelessness of people using the system.
Cloud based accounting systems offer significant advantages to help you grow your business. They represent accounting systems of the future that you can use today because their unique capability and enhancements such as dashboard and performance measurement tools. They also facilitate utilization of virtual financial experts to assist you in managing your business.
Cloud accounting systems allows businesses to take advantage of cost effective virtual advisors and cloud technology tools to accelerate growth and increase profitability. There’s lot’s to gain from cloud based accounting and with minimal risk.