In today's digital environment, data protection is paramount for businesses of all sizes. Whether you're a small startup or a large company, the integrity and security of your financial information are critical to your success.
One area of data protection that should constantly be reviewed is when using an external bookkeeper. In this blog, we'll explore how bookkeepers protect your business data, ensuring your financial records are accurate, secure, and compliant with relevant regulations.
Bookkeepers are responsible for managing and recording your business's financial transactions. Their duties include tracking income and expenses, reconciling bank statements, and preparing financial reports. However, their role goes beyond just keeping the books in order. Here's how bookkeepers protect your business data:
Bookkeepers are often the first line of defence when it comes to protecting your financial data. Reputable bookkeepers will implement robust security measures to safeguard sensitive information. If you decide to outsource your bookkeeping to a local provider, such as JRMA, you can expect to experience the following:
ID checks: As a CIMA registered accountancy firm, JRMA has strict regulations that we have to follow. These include abiding by the Anti-Money Laundering and Counter-Terrorist Funding Regulations. When you sign up to be our client, we will ask you to provide evidence of who you are. This will be in the form of a photo ID (passport, driving licence, etc.) and to prove your address, such as with bank statements or a utility bill. Even if we have known you outside of work, we must still log this information on our system before carrying out your bookkeeping duties.
Password protection and encryption: Responsible bookkeepers ensure that strong, unique passwords protect all financial software and documents. They also enforce regular password updates to prevent unauthorised access. At JRMA, when setting up or changing passwords, we will always send or ask you to send the password in a different form of communication, such as text. We also use software that uses encryption technology to protect your business data so that if it is intercepted or accessed without authorisation, it remains unreadable and secure.
Access controls: Reliable bookkeepers restrict access to your business's financial information based on a 'need-to-know basis' principle. At JRMA, we confirm who is allowed access to your financial data and set up systems that ensure they only access what they need to. This minimises the risk of internal breaches.
Data loss can happen due to hardware failures, cyber-attacks, or natural disasters. We protect your business data by performing regular backups and storing them in secure, off-site locations. In the event of data loss, JRMA can quickly restore financial records from these backups, ensuring business continuity.
Continuous monitoring and auditing of financial transactions help bookkeepers detect and prevent fraudulent activities. The team at JRMA reviews your business transactions for anomalies and inconsistencies that could indicate potential fraud. By conducting internal audits, bookkeepers ensure that your financial records are correct and comply with regulatory standards. You have the peace of mind that steps are being taken to reduce the chances of anything untoward happening in your business.
Unfortunately, a bookkeeper is not required to be qualified or regulated. As a business owner, you may be putting yourself and your business at risk of data breaches, fraud, etc. Registered bookkeepers and accountants are well-versed in the regulatory requirements governing financial data protection. Not only do they abide by the anti money laundering (AML) regulations, as mentioned above, they comply with other laws, such as the General Data Protection Regulation (GDPR). Bookkeepers who comply with these regulations will protect your business data and help you avoid costly fines and legal repercussions.
One of the most effective ways bookkeepers protect your business data is by educating employees about data security best practices. At JRMA, this includes annual training on the AML regulations and GDPR. This training is part of each employee's annual continuing professional development (CPD) requirement, which qualified bookkeepers and accountants must undertake.
By fostering a culture of data security and teaching employees what to look out for, we help minimise human error and reduce the risk of data breaches.
All JRMA employees must also sign an NDA from the day they join our practice. This document prevents them from talking about your business to anyone who does not work for JRMA or who is outside the client relationship.
If you would like us to liaise with HMRC on your behalf, we will ask you to authorise the HMRC ‘Digital Handshake’ agreement so that we can communicate directly with them regarding the tax affairs of your business.
When selecting a bookkeeper to protect your business data, choosing someone with the right skills and experience is essential. Here are a few key qualities to look for (all of which you will find at JRMA):
Attention to detail: A meticulous bookkeeper will ensure that all your financial records are accurate and up-to-date.
Tech-savvy: With the increasing reliance on digital tools and cloud accounting software, a tech-savvy bookkeeper can implement and manage advanced security measures effectively.
Integrity: Trustworthiness is crucial, as bookkeepers can access sensitive financial information.
Experience: An experienced bookkeeper will have a proven track record of protecting business data and ensuring compliance with regulations.
We have written another blog which goes into more detail about the qualities to look for in a bookkeeper. You can read 'Top 3 qualities to look for in a bookkeeper' here.
In a world of increasing data breaches and cyber threats, the role of a bookkeeper in protecting business data cannot be overstated. By implementing strong security measures, ensuring regular backups, monitoring for fraud, maintaining compliance, and educating employees, bookkeepers act as guardians of your financial information.
Investing in a skilled and trustworthy bookkeeper, such as JRMA, is not just about keeping your books in order - it's about safeguarding your business's most valuable asset: its data. So, the next time you think about data protection, remember that your bookkeeper plays a crucial role in keeping your financial information secure.
