The April 17th tax deadline has come and gone. You can now rest easy, right? Or can you? What about data security?
You’ve filled out the necessary tax forms and completed your return after reconciling your income and expenses for the year. The headache of the dreaded tax season is now over and you can get back to doing work you actually enjoy.
While the tax season may be over, you should still keep all your business records (invoices, payment records and expense/deductible receipts). In fact, the IRS requires that you keep these records for at least three years from the date of your return.
And, if you want to err on the side of caution keep these records for seven years. Indeed, some accountants recommend this as the IRS can still investigate you in year seven if you took a deduction on bad debt.
If keeping your records for that amount of time is that critical, it makes sense that you keep them secure, right?
“But, My Business Records Are Already Secure”
You may feel that your records are already safe. Maybe you store these records in a folder on your computer or make duplicates that you save to a USB. Or, perhaps you secure them in a filing cabinet, together with your shoebox of receipts, just in case the taxman comes knocking.
The problem is that these methods aren’t as secure as you may think. Computer hardware can seize and you can lose that USB. And, let’s not forget: Disaster can strike.
Think of the 2017 hurricane season or the recent floods in Houston. Disasters like these can cause severe water damage to hardware and any records can become unsalvageable.
Or, what about identity thieves who decides you’re a target? These thieves thrive on the vulnerability of small business owners who often have poor security systems in place.
That email you send to your accountant can easily be intercepted. That shoebox of receipts you deliver by post or hand can fall into the wrong hands. And so it goes.
We admit, the chances of these disasters happening are slim and your shoebox of receipts is probably safe. But, why risk losing your records if you don’t have to?
Rather invest in a solution that secures your data and also provides many other benefits for your business.
Data Security on the Cloud
According to a Cloud Industry Forum report, 99% of companies in the UK that have used the cloud to secure their data, have never experienced a security breach. This is hardly surprising as security is one of the top priorities for cloud providers.
Most providers – the ones that are worth using that is – offer encryption. Encryption – a way to conceal data in code to protect against unwanted access, is one of the safest ways to secure data.
Is it any surprise that Whatsapp introduced end-to-end encryption in the first half of 2016 to ensure that messages are only visible between the two parties sending them?
Other companies provide secure ways of sharing content. Box, for example, let’s you send a preview of a file instead of sending the actual file. And, DropBox also offers two-factor authentication which means you use your password to log in as well as a one time code.
The point is: The cloud is one of the safest places to store your business records.
How Do I Secure My Records in the Cloud?
If you’re like many small business owners, you fall along the spectrum of recording and tracking expenses in an excel spreadsheet and keeping a shoebox of receipts. The problem is: This is a time consuming and messy process and you’re often scrambling come tax time.
Furthermore, to safeguard your records against disaster you need to create backups in the cloud. You could, for example, scan your receipts and save them to a Dropbox folder. You’ll also likely have to invest in tools and systems to protect this data (assuming you’re serious about security). This entire exercise can fast become a costly one.
But it doesn’t have to be this way. A cloud accounting solution will put your income and expense tracking on auto-pilot and store this record safely, so you never have to worry about making a backup.
You will also save a lot more money: Instead of investing unnecessary money in systems and security measures, you can piggyback off the security tools the solution already offers.
What’s more, you’ll become a pro at tracking your financials year-round, and not just at tax time. Take comfort knowing your finger is on the pulse of how your business is doing.
One solution that will help you do this is FreshBooks.
Always Have a Secure Business Record with FreshBooks
FreshBooks is accounting software that simplifies billing, income and expense tracking. Because it operates in the cloud, you will always have access to the invoices and receipts needed to file your tax return.
Need to access a receipt from a specific date? No problem. Need to refer to all your invoices for a particular month or even track “other income”? Again, no problem.
This record will always be available because FreshBooks makes it a priority to protect and safeguard your data, at all times.
This is evident in FreshBooks’ security standards and protocols as well as ourfocus on maintaining the reliability of the software.
The cloud may be incredibly safe, but data breaches do happen. That’s why it’s important to do your research and make sure the solution you choose has certain security specs.
For example, FreshBooks provides:
- 256-bit SSL Security: One of the most secure encryption method out there
- Firewalls: Your data in FreshBooks is secure behind Cisco-powered firewalls
- Vulnerability Scanning: Alert Logic regularly scans servers for vulnerabilities and fixes problems promptly.
- Intrusion Detection: A system that monitors unusual behavior and communicates with AlterLogic
- Physical Security: FreshBooks data is secured on the state-of-the-art Rackspace servers which provide “ biometric access controls, constant surveillance, redundant power feeds and generators, robust fire suppression, and carefully monitored climate control to protect the servers that store your data and manage your billing.
Thanks to redundant servers and data centers your data is always available – even if there is a hardware failure. Separate data centers – away from the primary one – ensures that data is still available even if there’s a disaster.
Additionally, data is backed up each night and stored off-site to protect against disasters such as floods. With all the above, you can take comfort knowing that your records are safe.
Many More Benefits
Of course, FreshBooks isn’t a cloud storage system – that’s just one added benefit of using it to manage your accounting.
Besides keeping your records safe, FreshBooks offers many other compelling benefits:
- Send professional-looking invoices in a matter of minutes
- Get paid faster with online payments
- Track all your other, non-invoiced income
- Record and categorize expenses so you’re prepared come tax time
- Know where your business stands at all times thanks to dynamic financial reports
- Craft stunning proposals and clients that “wow” your clients.
- Manage your time, team and productivity
- Manage finances, billing and projects in one place (less moving between apps)
The added benefit of data security on the cloud is really just the icing on the cake!
So, what are you waiting for?
Take control of your small business today by using FreshBooks and rest easy knowing that your business records are always one click away. With a free 30-day trial, you have absolutely nothing to lose.