Outsourcing in accounting is a common practice. You can focus on the core activities of your business by outsourcing the accounting function. However, you should consider outsourcing to the right firms. Data security is a growing concern for businesses as they work with offshore teams. Cloud computing enables collaboration and remote working. However, if not handled properly, it can also cause data security breaches.
At Pransform, we are always conscious of the data security needs of our clients. We want our clients to safeguard their interests as well.
Data security refers to the practices of protecting digital from unauthorized access. It also means protecting digital data from intentional or unintentional damages.
Data security involves several techniques, standards, and technologies. Accounting firms also need to adapt to these data security standards.
Here are 4 questions to ask about data security while working with offshore teams for your accounting outsourcing projects.
1. Do You Use Data Encryption Methods?
Ask your offshore team if they use data encryption methods at all. If they are concerned about their website and portal security, they’ll use encryption protocols. Most firms use SSL 128 and SSL 256-bit encryption standards.
If there is a need to communicate through social apps, you must choose ones that come with encrypted communication. It will further protect your data and valuable information from data security breaches.
Apart from using encryption protocols, ask your offshore teams to use discrete access levels for staff members. Even if both sides use encryption standards, unauthorized access or third-party access to data can cause damage.
Using data encryption for website and client portals has become a standard practice with accounting firms. However, you should ensure to follow the standards from both sides.
2. Do You Use Accredited Password Managers?
You can create a strong password for your email, accounting software, and social media account. But as the number of accounts increases, it becomes difficult to manage strong passwords. Using the same password at multiple places can be destructive for your business.
Asking whether your offshore partner team has a strong password policy in place should be your priority. Even if they create strong passwords, it may not suffice the need for sensitive data security.
One way of handling the issue is to use password manager programs. The password managers can create and store strong passwords for you or the offshore team securely. Without strong passwords, hackers can easily penetrate your sensitive data storage spaces.
Outsourcing the accounting function seems a straightforward task at first. However, these fine details about data security should be your concern. Otherwise, a small data security breach can cause you severe business and financial damages.
3. How Do You Deal with Your Physical Data Security?
It’s a common notion to think of data security as an online aspect only. However, physical security protocols are equally important.
Accounting outsourcing firms often keep clients’ data in hard drives. Some even keep hard copies of important data and documents for their clients. Thus, physical access to these sensitive documents is important.
A linked issue with physical data access is the use of public internet networks. For instance, if members of your offshore team use cloud accounts through public Wi-Fi, they’re prone to hacking risks.
Even if your offshore team uses fully digital records, it’s important to analyze the access protocols. Only authorized members should have access to the sensitive clients’ data. Also, the service provider must keep the data backups securely.
4. What is Your Policy Should a Data Breach Happen?
It is inevitable to incur some sort of data security breach at any time. A professional outsourcing partner would have a policy of compensation to its clients if the breach happens at its end.
Make sure your offshore team informs you immediately and takes appropriate measures in case of a data security breach. Similarly, you can reciprocate the same policy to ensure data protection at both ends.
Remote working can offer flexible solutions to accounting outsourcing firms. However, you can face several data security challenges. Make sure to partner with a team of professionals that fully understand the needs for data security standards.