I get frequently asked if cloud-based accounting is secure. My answer – “what has you think desktop computing is secure?”
The answer I hear most often is something like this – “I want to control my own data; I don’t trust putting it online. What if someone hacks into it?”
The other risk people fear is what they hear about online social media giants like Twitter and Facebook, and how your privacy is constantly compromised.
The difference is this – you gave up a large piece of your privacy when you signed on to use Facebook for free. They don’t charge you to use their platform, so they – in turn – sell to you by mining your data and preferences and targeting ads towards you.
The difference between online banking and online accounting software is that you pay to use the Platform.
If anyone ever offers you a free accounting software program – in the cloud – run! They will compromise your data and privacy because they have to make money somehow.
When you pay to use a Platform you get privacy and data protection in return.
The biggest impact of maintaining your own software outside the cloud is how to recover from loss of data. I have seen (and even experienced) the devastation of loss of data from viruses, hardware breakdowns, theft, and losing equipment.
Laptops Disappear at Security
The other day I was going through security at the airport, and while putting together all my stuff again – 5 trays worth! – I saw a security lady calling out to anyone listening – “someone left their cell phone!!”
I saw it was a very expensive looking new iPhone. I got chatting with the lady, and she said, “you have no idea the stuff people leave behind!” Even laptops.
She went on to say, “imagine the look on their face when they get buckled in, the plane is taking off, and they realize they left their business laptop at the security screening.”
As lousy as that would be for me – the actual recovery would be – buy new laptop, logon to various pieces of software and, with having all data in the cloud, badda boom, badda bing, back online, full data accessibility within minutes.
Just last week we talked with a prospect for our business and one of the questions we always ask is – “what software do you use?”
Well, there was this long pause, and the answer slowly came: “we don’t know. Our CFO passed away tragically, and everything was on his laptop, and the laptop ended up in a relative’s hands, and we don’t have access at all to any data or even software”.
Oh my, oh my. What to do? In this case everything will have to be re-created from banking records. Not a fun task, and on top of it expensive!
Many of our clients have experienced a loss of data through a ransom-ware virus, or a hardware failure. This, again, can be very time consuming, stressful, and expensive to recover from.
We had this happen to one of our virtual servers. The virus came through a client email, and upon opening an attachment to that email, our entire server was hit with a virus, and ALL the data was corrupted. Every…single…file…was…gone. Corrupted.
How did we recover?
Through the miracle of the cloud. One word – Dropbox.
At the single point of failure – the virus attack – Dropbox considered that to be a change in each file so (literally one nano-second before) the Dropbox system has a clean record of each file. So each file was fully restored and usable.
I was able to recover 100% of the data through the Dropbox system!
Now, we barely use our server, having moved most of our clients to fully cloud-based software, and everyone sleeps better because of it.
Hacking the Cloud
Coming back to my earlier point that people raise – what about hackers in the cloud?
Let me ask you a question – when was the last time you heard about someone hacking into a major Chartered bank in Canada?
Haven’t heard a thing? That’s what I thought.
What about your accounting software?
Well, honestly, there is not much worth hacking in there. Unless you are storing credit card details of your customers in your accounting software, your debits and credits are not that interesting to look at.
What about holding your data ransom? (This is when a virus seemingly destroys your data, and for a payment to the hackers, they will sell you an unlocking key to unscramble the virus, restoring your data to full integrity).
When your data is in the cloud, the servers have multiple backups to ensure constant uptime. So in the event of a viral attack, a redundant server would kick in.
If you have sensitive data that you are concerned people could access, then make sure that you use two-factor authentication for all your sensitive accounting information.
Two-factor authentication is simple this:
Step 1 – you log in to your software with your password and username
Step 2 – the system then sends a random 6 digit code to your cell phone that you key in.
At that point, for it not to be you, it means you have given someone your email, password, AND your cell phone to receive the code. You would – more or less – have to be kidnapped for that to happen.
Thanks for reading…