By design, accounting firms are focused on providing detailed information to their clients. But just like other businesses, the distribution of this information must be secure, and delivered to clients safely.
With the vast trove of personal financial data at their disposal, however, accounting firms have become a prime target for hackers everywhere. This was the case last year with a New Jersey-based firm that lost more than 12 GB of W-2 statements, tax returns, correspondence and more. Accounting firm Presnell Gage also dealt with a similar security breach, with hackers accessing tax returns and clients having fraudulent tax returns filed without their authorization.
As these types of breaches continue to increase in frequency, many accounting firms are working hard to secure tax records and eliminate the unwanted effects that come from these types of attacks.
The consequences of a data breach on accounting firms include millions of dollars in lost revenue, damaged reputations, and lost clients. And while larger corporations may have the resources to properly invest in the right security measures, smaller- and medium-sized companies may have a harder time taking appropriate action.
What Makes Accounting Firms Such a Target?
Put simply, hackers attack financial and accounting firms, because they know they hold access to valuable data. Financial and accounting data can easily be sold for a profit, or used for other malicious means such as identity theft, tax refund identity theft, or other types of fraud.
Just imagine working years to build up your client base, and then suddenly having to inform your clients that their financial data has been compromised. Even worse, now their data is in the hands of criminals looking to commit fraudulent activity with your most vital assets.
While the results of any data breach or cyber hack can be devastating, these scenarios also make the process of securing accounting data challenging and time-consuming.
But accounting companies can eliminate these issues. While reactive measures taken after a hack can be costly, and may be too late. Proactive measures assure your clients that their data is in good hands.
5 Solutions for Securing Tax Records:
So how can you find the right approach and tools to maintain and secure your clients’ accounting data?
Knowing how to secure your tax records is a tricky endeavor in today’s world. Cloud solutions are one way to go, and many other data security tips can help keep clients’ data safe from data loss and breaches as well.
The following best practices will help secure accounting data and ensure the trust of your clients.
- Make sure you limit access to client information. All private employee records, legal documents, balance spreadsheets, check registers and valuation analysis should be kept as far away as possible from any prying eyes.
- Always create a backup of your clients’ data, and encrypt it as well.
- Consider using a set of dedicated physical security protocols. This combined with software security will bring a new layer of protection for your clients.
- Train employees on how they can stay away from potential breaches and attacks. Contact an attorney or someone else familiar with data breach regulations, to help assist with the overall management of the incident and be able to connect with third-parties like law enforcement, forensics, insurance, etc.
- For smaller accounting firms, create a good strategy for implementing security solutions – including free anti-virus and anti-Trojan solutions. Scan your network often, and use a dedicated and free network monitor to see who’s accessing the network. If you see anything out of the ordinary, work towards limiting access going forward.
The Safe-T Financial Service Solution
Implementing these solutions can be a costly and time-consuming challenge for firms today. Unfortunately most tools don’t appropriately secure data access, or the exchange of such sensitive data.
Safe-T’s financial service solution was created to be a one-stop shop for any financial company’s needs. Featuring secure file upload, secure data exchange with business partners, secure partner access to financial applications, and GLBA compliance for U.S. users, the Safe-T financial services solution ensures comprehensive security for all tax records, financial reports and other sensitive and private data.
Take control over the security of your accounting business. With Safe-T financial and accounting services, you’ll have the peace of mind of knowing that your clients’ financial data is safe and sound at all times. For more information on how to maintain the safety of your firm, download the brochure: Accounting Firms are Under Attack.
Editor's Note: This post was originally published in December 2016 and has been updated for accuracy and comprehensiveness.