Is Cloud Accounting Safe?

Check out the YouTube video that accompanies this blog post by clicking the image below. Make sure you subscribe so you don’t miss a video:  

 
 
One of the questions that I get the most from my clients is: Is cloud accounting safe? Is it secure?

The accounting world is rapidly changing, and there is a big push by software companies to get companies onto cloud-based platforms. Intuit, the company that makes QuickBooks, practically hides the desktop platform on their website. It’s buried way down at the bottom of the QuickBooks page.

What is the cloud? “The cloud” refers to the internet, and more specifically, the storage of data on servers that aren’t physically located at your home or office. These servers are usually in huge data centers that are climate controlled, kept extremely secure (sometimes with armed guards).

They also often use redundancy, meaning your data is saved in multiple locations. So, if one server goes down or a certain data center has a fire or a flood, you might never even know because the cloud provider had your data synced across multiple servers and probably even in different geographic locations.

This data is further kept safe and secure through the use of encryption which makes it so that only authorized people or systems are able to access it. Banks also use encryption to keep your data safe, and most email platforms are cloud-based and encrypted to be secure.

In some ways, your accounting data might be more secure in the cloud than it is saved on your local computer. It’s impossible to say that anything is 100% secure, but the cloud can at least be a bit better.

I mentioned that the data is encrypted on servers that are kept in highly-secure facilities, sometimes with armed guards. How does this compare to your laptop when you leave it in your car while you run into the grocery store on your way home?

Or your office, which could get broken into or experience a fire or flood? If you are using a Desktop system, you absolutely have to make sure your data is backed up somewhere else so you don’t lose it, but having your data stolen is another issue altogether.

The biggest risks when it comes to cloud accounting are:

• Your login information could be compromised, so someone can login with your username and password.
• Users could have improper access and potentially sharing information they shouldn’t, even by accident.

How can you keep your QBO data safe?

1. If multiple people have access to your QBO file, review their access permissions to make sure they can only see what they need to see to do their job. If an employee doesn’t need to see customer or vendor information to accomplish their job function, they shouldn’t have access to that information. 
2. Use a password that you don’t use anywhere else, and PLEASE don’t write it down on a sticky note or in a file on your computer where it can be stolen.
3. Change your password at some set interval – maybe every 3 months.
4. Turn on 2-factor authentication (“2FA”), and require all users to do the same. Your security is only as strong as its weakest link. 2FA is where QuickBooks will send you a text message with a one-time code that you have to enter. If someone knows your login username and password, this step will add extra security to help prevent them from getting all the way to your data. You can see my post on how to turn on 2FA by clicking here.