Outsourcing has been a widespread practice since 1989. During the previous three decades, it has been a critical part of global business management. That isn’t to suggest that everyone is on the same page. The reactions range from violently negative to ecstatically positive.
Whatever your thoughts about outsourcing, one thing is certain: the gig economy, like some of the world’s greatest corporations, will still be recuperating by 2022.
Data security is one of the most important issues US organizations face today. In truth, hearing about yet another major data breach is becoming more common, and hacking tactics are outperforming even the most sophisticated security solutions. To have a successful partnership, organizations that outsource any of their duties to a third party must consider this as one of the most critical problems to handle. When outsourcing, how can you safeguard your data and that of your clients?
Finance and Accounting were some of the first functions to be outsourced, and the trend continues. According to Ed Thomas of Ovum research, the number of F&A outsourcing contracts worth $1 million or more increased in 2012 over the previous year.
Choosing outsourced accounting firms is very difficult, but adding in all of the security procedures that should be in place with your source may be overwhelming. “And what kind of security measures do we need?” you might think. There is no need to be alarmed. We’ve put together a quick list for your convenience.
We’ve built the tools and processes to ensure that the projects we assist get the quality and security they need, and we’re excited to share them after working with several US clients. Read on to learn how to outsource data security and put your worries to rest.
1. Evaluate your data security protocols
The first step is to ensure that your internal processes are up to date and in excellent operating order. Examine your data security policy. Data categorization metrics that may distinguish between business-critical and non-business-critical data should be included. The policy should also include defined rules and techniques for data management. These recommendations should be reviewed regularly by your company’s managers and stakeholders. The most commonly outsourced accounting services are payroll accounting, accounts payable, and accounts receivable. According to the Survey, companies are “moving up the value chain” in terms of the types of F&A services they outsource.
2. Choose the best outsourcing partner for you
Choosing the right partner is one of the most important steps to take when outsourcing accounting services. First, select an accounting firm that has a strict security policy. Then, check to discover if the firm you’ve picked places a high focus on security.
The data security standards used by your vendor must be capable of preventing sensitive data from being copied to portable devices. Check to verify if the outsourcing company is subject to strict intellectual property laws.
If at all feasible, have your vendor follow your security practices and rules.
3. Take active measures to protect your data
Get into the habit of using application layer firewalls and database monitoring gateways before outsourcing accounting operations. These safeguards will aid you not only in enforcing usage standards but also in preventing you from exploiting vulnerabilities and abusing privileges.
Select a business that provides this kind of data security protection and is credible as well. It should have a reputation and name in the market. Ensure that the employees providing outsourcing accounting services are trained on how to manage and safeguard business-critical data.
4. Create an incident response system
Even if you follow best practices, you can never be confident that your security measures are impregnable since hackers are always coming up with new ways to attack. As a result, system backups and the development of an efficient incident response strategy are essential. As the sector expands, companies that contract for outcomes are exploring new concepts and seeking new answers to enhance their financial and accounting systems. They’re expanding into new areas of finance and accounting, new industries, and new firm sizes than in the past.
The following stages should be included in your strategy:
- Define and classify the instances into two categories: low-impact data theft and high-impact data theft.
- Determine what resources will be needed to respond to the situation.
- Prepare documentation for incident management response.
- Develop technological and organizational risk-mitigation strategies.
- Employees should be educated on incident management procedures.
5. Implement strict security metrics
If information security metrics are developed and agreed upon from the start, the outsourcing partnership is less likely to fail. Internal data security comprises the following:
- Metrics to evaluate security measures.
- Parameters to analyze security processes.
- Technical measures for assessing the quality of your hardware and software, as well as those of the seller.
- Furthermore, password length, frequency of updates, and adherence to security standards are only a few of the numerous procedures involved in guaranteeing proper data protection.
As we’ve been providing outsourcing accounting services for a few years, we understand why CPA firms are hesitant to engage the services of an outsourced accounting firm. As a result, we’ve put in place the most stringent data security protocols.
Given that a majority of our clients are among the country’s largest CPA firms, the level of information protection supplied to them is frequently higher than the level of security measures taken by the clients themselves, which says a lot.
CapActix is the best accounting outsourcing firm if you are looking for one. Our experience shows that leaving responsibility for data security to a seasoned outsourcing partner produces the best results. To discover more about safe and secure accounting outsourcing services, contact our specialists right away. With best-in-class outsourced accounting services, extremely professional staff, and experienced people, we thrive to give you the best always.