Are you keeping your accounting client data safe?
If there’s one question that should keep you up at night, it’s this one. And for good reason. Cyber-attacks have increased by 31% in 2021 alone. As more companies make the switch to a hybrid or remote-only model, there are many more opportunities for predatory cybercriminals to exploit. This includes finding and maliciously leaking your proprietary data or holding it ransom unless you pay. And if you don’t pay, it can lead to information leaks and identity theft, just to name a couple of the worst outcomes.
Cyber attacks are not a matter of if, but when. Cyber attacks eventually happen to every organization, no matter how big or small. It’s better to be prepared now instead of hoping for the best. When a cyber-attack happens to you, you not only lose your clients’ trust, but you’ll also lose their business and irrevocably damage your reputation.When a cyber-attack happens to you, you not only lose your clients’ trust, but you’ll also lose their business and irrevocably damage your reputation. Click To Tweet
So how do you keep your accounting client data safe?
In this post, we’ll discuss five practices to implement in your accounting firm to keep your clients’ information secure.
Why Is It Important to Keep Client Data Safe?
Before we dive into the how, let’s discuss why it’s so important to keep your clients’ data safe.
When you operate an accounting firm, you have a responsibility to your clients and to all of your stakeholders to protect sensitive information. Data security involves the collecting, storing, accessing, and archival of sensitive client information. The information can include any personal details, such as name, address, email address, personal identifiers, credit card numbers, bank details, health records, and much more.
This is information that can either be personally tied to an individual, used in a way to learn more about that individual, or used to compromise their right to privacy in some way.
Such sensitive data must be handled properly, from the initial transmission of the data to its final destruction. If protocol is breached at any time and you lose confidentiality, you risk also losing the client’s trust and business.
Data protection isn’t just important for keeping your accounting client data safe. It’s also your responsibility to protect your employees’ sensitive information and your organization’s proprietary information
Here’s a rundown of why data privacy is important for accounting firms:
Data Privacy Protects Your Clients’ Information
When a client enters into an agreement with your accounting firm, they’re also trusting you to protect their information from bad actors. Whether that agreement is short-term or long-term, the expectation is that you will reasonably safeguard their data.
It Protects Your Business’ Reputation
Even though you may face legal consequences for failing to protect their sensitive data, there are far more damaging consequences that can occur if you don’t. A client who loses trust in your organization will likely take their business elsewhere and they’ll also badmouth your firm in the process. One negative review on your Google Business Profile can cancel out nine positive ones. If you destroy your client’s trust in your business, it can likewise destroy your business’ future.
Reliability is an important signal for any accounting firm. A security breach can rob you of that.
It Protects Your Business’ Bottom Line
A data breach will result in massive client attrition. When your clients discover that their information has been compromised, they’re going to leave your firm — some immediately and some eventually. When trust is broken, it’s next to impossible to get it back. Even if you’re able to smooth the waters with a successful public relations campaign, doing so will still cost money and pull from your revenue.
It’s the Law
- How you store your clients’ data
- Where you store your clients’ data
- How long you are able to store your clients’ data
- How you can lawfully use your clients’ information
- What you must do when you or your client terminates their relationship with you
Don’t make the mistake of thinking that your business is too small for hackers to target. Hackers often hit small accounting firms because they’re easier to compromise. Smaller businesses rarely take even the smallest necessary measures to avoid security breaches. And the aftermath of a cyber attack can be devastating to a smaller business that doesn’t have the financial resources to bounce back after a hit.
How to Protect Your Clients’ Data
Here are a few essential ways to successfully protect your clients’ data.
1. Only Collect What You Need
Avoid collecting too much information from and about your accounting clients. While it may seem like a good idea to know as much as you can about your clients, it also puts the burden on you to protect all of that extra information. Where will you store that information? Who will have access to it? How will you keep it secure from unauthorized access?
Did you know that collecting more data from your clients will also attract more hackers? Hackers are always on the prowl for high-value data, and you’ll land on their radar simply because you’re collecting a ton of information from your clients that these malicious actors can then use. If you don’t need the data to perform your accounting tasks, don’t collect it.
2. Limit Data Access
The more people on your team who have access to your clients’ personal information, the more vulnerable your accounting firm is to a potential security breach. If just one of your employees clicks on a bad link, they can inadvertently kick off a malware attack that will invade your entire system. Instead of taking that chance, limit the number of people who have access to private client information.
3. Reduce the Number of Tools You Use
Instead of using multiple tools to handle your client’s information, aim to use one tool for all of your accounting needs. This way, you don’t have data stored in different tools, some of which may not comply with your data privacy best practices.
Also, when you store data across multiple tools, you increase the likelihood that your clients’ data will be exposed to malicious actors. The bad guys may attack your backup data storage app and, what’s worse, you may not even know it because it’s not your primary client management tool.
4. Encrypt Your Client Data Transmission
One of the best ways to protect your clients’ data is to encrypt it from end to end. This includes when your client sends their sensitive information to you and when you send sensitive information back to them. It’s important for you to make this information encrypted (i.e. unreadable) to hackers.
5. Choose the Right Practice Management Tools
One guaranteed way to protect your clients’ data is by using the right accounting firm management tool. Our all-in-one practice management software was built to protect accounting firms from serious security threats, both large and small.
With Mango Practice Management, you’ll get the following security features:
- Client portal – Give your clients access to one convenient hub where they can view all of their documents and personal information online.
- Secure file sharing – Some clients won’t ever want to use a client portal, and that’s okay. Instead of forcing these clients to sign up for another client portal, you can use Mango to securely share files directly from their inbox.
- Electronic signature requests – Give your clients the ability to sign documents without leaving their inbox with our e-signature plug-in for Outlook and Google.
With the rise of cyber attacks, your clients’ information is more vulnerable now than ever before. It’s up to you to keep their data — and your accounting firm’s reputation — in the clear. If you haven’t already, schedule a demo to see how Mango can help you protect your client’s sensitive data.