As a business owner, you would want your bookkeeping tasks done right and nowadays outsourcing these tasks are an ideal and cost-effective solution. Outsourcing bookkeeping tasks give a lot of benefits like freeing up more of your time to grow your business, it is a more cost-effective alternative compared to having a full-time bookkeeper, you'll have a business advisor and professional bookkeeper on your side, etc. It is definitely a win-win situation, but you have to remember that you are sending a great deal of sensitive financial information to this third party. The benefits are indeed overflowing but you still have to be wise to avoid feeling unsecured for the data that you have provided.
Data Privacy is critical to your business and here are five questions to ask 3rd party bookkeeping firm so you have a peace of mind that your financial data are secured:
1. Physical Security
Question: Do you have any physical security at your place of business? If so, please specify.
Indeed, everything is electronic nowadays, but we can’t just forget the physical aspects of the workplace of the 3RD party bookkeeping service firm. Ask who have access to the records area, if the server is fully secured, and the over-all security measure of the vicinity itself.
2. Encryption Method
Question: Please specify the encryption methods you use on your systems and portals.
Encryption is a method by which plain text or data are converted to an encoded version that can only be viewed by units that have access to the database, this also prevents hackers to easily access these kinds of secured databases. There are different encryption method and it depends on the system being used by the outsourced bookkeeping service. Make sure to have them explain these methods so you can be certain that they are knowledgeable about it and so you can be well-informed about it too.
3. Storage Area for Your Files after Finishing it
Question: If you are finished with my files and data, what happens to it?
Of course, don’t expect the bookkeeping service firm to keep your files forever after they are done with it, make sure you ask them what they do with it after accomplishing the bookkeeping task that you have outsourced to them. Do they store it for a specific amount of time, or do they destroy it after providing you a copy, or do they just keep it on hand? Be sure to clarify this because, at the end of the day, these files or data belongs to you so you should know what happens to it if they are done working on it.
4. Network Security
Question: Do you have network security in place?
A secured network for a bookkeeping service firm is a must for their workplace. This prevents hackers to easily connect to the network and access the confidential financial data that you have provided the service. Make sure to ask who their hosting provider to be well-informed on who handles their data protection.
5. Policies on Data Breach
Question: What are your policies in the event of a data breach.
Expect the worst-case scenario and imagine if a data breach happened in the physical or digital workplace of the bookkeeping service firm, to make sure that they are prepared for it, ask what their policy is. Whether it is a physical or digital breach, the bookkeeping service firm should have a policy about it so make sure you are knowledgeable about these rules.
Indeed, outsourcing the bookkeeping needs and financial advisory needs of your company is the most cost-effective way so you can focus on growing your business, but as always, it may come with some kind of risk. You are providing confidential financial data to a third party so it is wise for you to be knowledgeable about how the bookkeeping service firm secures it. More importantly, since nowadays everything is done digitally, you should be knowledgeable on how they protect the data that are stored online.
Always be wise and be well-informed with your confidential data!
To help you and your company with your bookkeeping and tax preparation needs and will make sure that your data are well-secured, contact us today at firstname.lastname@example.org or at 832-437-0385.
We help you plan, forecast and analyze your financial data
so you can get on top of your finances today to grow your
small business big tomorrow.
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