Is Security an Issue with Cloud Accounting Programs?

Cloud accounting is a growing field, and it’s easy to see why.

Moving your accounting process to the cloud provides remote access to allow round-the-clock collaboration for employees; centralizes your records; and allows for client and provider interaction.

But with fraudsters and hackers always looking for new ways to get a hold of sensitive data, how can you make sure a cloud accounting program provides enough security for your business?

Here are a few things to look for:

Data Encryption

One of the most important features of a good cloud-based application is secure data encryption.

Because the nature of the cloud means you have to send your data to the vendor’s servers, it’s possible for that information to be intercepted by third parties — or even by a careless vendor employee.

Cloud vendors that are committed to maximum data security will provide encryption to prevent unauthorized access. You should also find out exactly who in the vendor’s organization will have access to your company’s data.

Data Protection While in Transit

Encryption of data once it reaches the vendor’s end of the line isn’t very helpful if there’s no protection for the data while it’s being transmitted to the cloud.

When considering a cloud vendor, be sure you fully understand how they protect your in-transit data from being compromised.

This can mean a secure, encrypted connection from your company’s computers to the cloud, or the vendor could employ a Virtual Private Network (VPN) to ensure privacy of especially sensitive information.

Data Separation

Another feature you’ll want to make sure your cloud vendor provides is separate data storage for each of its clients.

This means that your company’s data won’t be stored alongside that of one or more other companies. Storing several clients’ information together increases the risk that they’ll accidentally get access to someone else’s sensitive data.

Security Breach Protocols

Many cloud vendors make bold claims about their security, some even going so far as to call it foolproof. But with more and more companies putting their valuable financial data in the cloud, those cloud servers start looking more and more tempting to hackers.

Since no system is truly foolproof, a good cloud vendor will have protocols in place to handle a possible security breach. Make sure you ask plenty of questions about their process.

What happens if someone opens a malicious email on one of your company computers? What if a company laptop gets stolen? What if, in spite of the vendor’s foolproof security measures, someone manages to breach their servers?

Cloud accounting can be a great way to streamline your business processes, save time and money, and improve your company’s overall efficiency.

But with so much sensitive information being sent between your company and the cloud, you’ll need to take some time and assess a potential vendor’s security measures before signing a contract.

Taking that time now can save you — and your customers — major financial headaches down the line.

About the Author: Freelance blogger Angie Mansfield covers a variety of subjects for small business owners, from business growth to marketing to

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