The “Cloud” is a mainstream business tool, offering cost-effective data and IT solutions geared towards business growth and development. More and more businesses are opting for outsourced accounting solutions, shifting the paradigm of software solutions for growing businesses. According to a 2018 survey by IDG, 73% of organizations already have some portion of their computing infrastructure on the cloud.
However, as data protection becomes imperative for businesses, migrating to cloud computing raises important questions about the efficiency of cloud computing security. Is cloud computing safe? Should you trust the cloud with sensitive accounting data? Read on to find out.
Is Cloud Computing Safe?
Unless a business has a competent internal finance team familiar with accounting software and sufficient bookkeeping resources, they will inevitably require help. There are two ways to go about it. Businesses can hire and train full-time employees or look into outsourced accounting solutions.
Outsourcing is far more efficient and cost-effective. One reservation that businesses have is security concerns pertaining to cloud-based solutions. Technological advancements and increasing security threats give rise to these concerns, which is understandable.
However, while it is true that cloud computing is susceptible to attacks and security threats due to the nature of remotely hosted servers, it is inherently no less secure than on-site data storage.
The alternative to cloud computing is self-hosted, on-site accounting applications and software. While data stored on a server in your office may seem secure, the risk of data loss and data theft is always present. Electrical damage, floods, fire, and even a coffee spill in the wrong place can lead to loss of important business data. Moreover, data stored on computers is still vulnerable to viruses and malware.
The truth is that cloud servers and traditional IT structures share more or less the same vulnerabilities. However, cloud computing is better equipped to mitigate the risk of data loss and data theft. So, while no system is completely free of risks, cloud computing presents a safer alternative to traditional options.
How Cloud Computing Protects Your Data
An average person may envision the cloud as obscure or penetrable. However, in business and IT, a cloud is a robust infrastructure designed to provide efficient data storage and protection. The only question remaining is how the cloud protects your data? Here are some factors that ensure optimal security for cloud-based accounting.
Eliminates Risks Associated with Physical Storage
Cloud computing relies on physical servers for data storage. These servers are lined up in large rooms and warehouses and connected to the internet. Cloud computing service providers typically acquire servers in several locations spread across different states and countries.
Multiple copies of data are stored in different locations eliminates the risk of data loss. Even in the event of a catastrophe at one data center, your business data can securely reside in a different server at another location.
Automatic Backups Provides a Layer of Protection
Creating and managing physical backup copies of important business data and documents is cumbersome and costly. Furthermore, it is prone to human error, and the threat of data loss persists.
Cloud computing provides an additional layer of protection through automatic backups and online restore options. In other words, switching to cloud computing means the convenience of automatic backup copies combined with multiple off-site storage locations without any additional costs.
Data Encryption Enhances Security
Cloud-based accounting software solutions employ encryption to protect data. It is a process that encodes the data to protect it from unauthorized users and enhance communication security between client apps and servers. It is advisable to opt for a cloud-based service provider that utilizes standard encryption practices, such as 128-bit SSL encryption, to secure data.
Digital Trail Records Every Business Move
Some cloud computing service providers offer specialized features that streamline business operations and help with auditing. For example, users can track every login to the service and any changes made to a financial transaction.
This provides a complete record of all activities along with a detailed history of changes made to any specific transaction. Consequently, you can keep track of everything and have an automatically generated paper trail to trace any transaction to its source.
Windes: Providing Reliable Remote Accounting Solutions for All Business Needs
With the security and other benefits of cloud computing, businesses can eliminate any reservations regarding safety and work remotely with outsourced accounting services to promote business growth and development.
Windes can help with outsourced bookkeeping, payroll processing, reporting and tax return filings, sales and use tax returns, personal property tax returns, compilations of financial statements, and monthly bank reconciliations. As a leading accounting firm, we deliver high-value accounting and consulting services to help businesses reach new heights of success.
We are leaders and advocates of embracing technological advancements in the finance industry and aim to provide remote accounting solutions for all business needs. For more information, connect with us today to explore your options.