Security Issues with Online Accounting
When it comes to the internet, security has always been a major issue. One is often reminded of Laurence Olivier in Marathon Man asking Dustin Hoffman: "Is it safe?" That is how a lot of people seem to feel about using the internet.
This is a particularly important issue with online accounting because companies are naturally very concerned about the security of their financial data. As a business owner, you don't want any of your companies financial records or numbers being looked into by others, lost, stolen or destroyed.
However, as I alluded to in a previous blog posting, security ends up being a no-brainer issue when it comes to online accounting. In fact, online accounting provides far greater security than traditional desktop or client-server accounting software.
First of all, the companies that provide online accounting (i.e. application service providers like Intacct and QuickBooks) generally have far greater security measures than most in-house systems. This includes state-of-the-art encryption, firewall and anti-virus systems that are constantly updated (in contrast to many companies, whose idea of updating their security is to download new virus definitions once a month). Plus, ASP's have multiple layers of protection to keep hackers and snoopers at bay, not just one line of defense. In short, who would you rather have protecting your data: you, or IBM (i.e. the company that Intacct uses)? I know who I'd choose- they're big, they're reliable, and it's part of their business.
Secondly, online accounting provides automatic backups (in most cases, nightly). This eliminates the time-consuming chore of backing up your data to zip disks, magnetic tape, CD's, keychains, or whatever new flavor of storage media is out there. More importantly, it eliminates the number one problem with any type of backup: the fact that people forget to do them in the first place. With online accounting, backups happen automatically, every day, no staff required.
Finally, online accounting follows the cardinal rule of backing up: moving your data off site. In reality, the greatest risks to data security often have nothing to do with hackers trying to break into your system. Instead, they have to do with catastrophes: hard drive crashes, computers being stolen or destroyed in a fire, or milkshakes being spilled on the server. At my old accounting firm we used to make weekly backups and then store the tapes in a file cabinet above the server, which seems rather lame when you think about it. With online accounting, your data is stored in some Fort Knox-style server farm.
All in all, you can see why online accounting provides the greatest security. The toughest part for most people is letting go of the idea that your data isn't secure unless it's physically in your possession (in the trunk of your car or wherever). At any rate, as you can see from the way I've written this posting, I got over that issue a long time ago.