5 tips to ensuring data security when outsourcing accounting functions

CPA firms all over the country have been delegating key functions to outsourced accounting firms in an attempt to reduce costs and gain access to a global pool of trained resources. However, while outsourcing has proved to be beneficial in many ways, it can sometimes open the door to data security threats.

The good news is, by following best practices and the right approach, your CPA firm can enjoy the advantages of outsourced accounting firms while keeping your business data safe. Here’s how.

1) Assess your internal data security protocols

The first step is to ensure that your internal processes are in order. Audit your data security policy. It should include data classification metrics that can distinguish between business-critical and general data. The policy should also clearly state data handling guidelines and protocols. These guidelines should be regularly accessed by the managers and stakeholders of your organization.

2) Select the right outsourcing partner

Selecting the right partner is one of the most important steps to be followed while outsourcing accounting functions. Select an outsourced accounting firm that follows a strict security policy. You must also want to ensure if the selected company makes security a rule in its organization.

Your vendor’s data security rules must be able to protect your sensitive data from being copied to portable devices. In addition, check if the outsourcing company has strong intellectual property protection laws.

If possible, try to bring your vendor to follow your security protocols and policies as well.

3) Take active measures to protect your data

Get into the habit of using application layer firewalls and database monitoring gateways before outsourcing accounting functions. These measures will not only help you enforce usage policies but also will prevent vulnerability exploitation and privilege abuse.

Choose a vendor who follows these types of data protection functionalities. Ensure that your outsourcing vendor is educating its employees on best practices for handling and protecting business-critical data.

4) Create an incident response system

Despite following the best practices, you can never be 100 percent sure that your security measures are bulletproof since hackers are continually developing new forms of attacks every day. Therefore, it is essential to create system backups and develop an efficient incident response strategy.

Your plan should include the following steps:

• Define and categorize the incidents into low-impact data theft and high-impact data theft
• Identify resources to respond to the event;
• Prepare incident management response documentation
• Develop technical and organizational measures to mitigate the risks;
• Train employees on incident management protocols.

5) Establish strong security metrics

Information security metrics, if established and agreed upon at the beginning, can prevent the outsourcing relationship to fail. Internal data protection includes:

• Parameters to assess security procedures;
• Metrics to evaluate security measures;
• Technical metrics for evaluating the quality of hardware and software at your as well as at the vendor’s end.

Additionally, password length, updation frequency and compliance with security standards are some of the many steps of ensuring adequate data security.

Conclusion

Having been in the accounting outsourcing industry for a good couple of years, we understand the cautiousness of CPA firms in using the services of an outsourced accounting firm. That’s why we have the most stringent data security measures in place.

The level of information protection our clients receive is often higher than the level of security measures implemented by the clients themselves, and given that most of our clients are some of the bigger CPA firms in the US says a lot!

Our experience shows that the best results are achieved when responsibility for data security is entrusted to an experienced outsourcing partner. If you want to know more about safe and secure accounting outsourcing, contact our experts today.