If all of your client data disappeared, would you still be able to meet the end of year tax deadlines for your clients? Most accountancy practices depend heavily on electronically-stored data, and the loss of any of this data could have a potentially devastating impact on the business.
As British technology journalist Jack Schofield's Second Law of Computing asserts, data doesn't really exist unless you have two copies of it.
Recent market research shows that most cases of data loss are the result of hardware failure or corrupted software (51%), although other major causes include human error such as file deletion or reformatting (27%); virus attacks or hacking (12%); and theft, malicious damage, power disruption, fire or flooding (10%)*.
Keeping your fingers crossed is not enough
Keeping client data safe, and making regular back-ups, is crucial. Backup simply involves keeping at least one copy of the original data. The original and the copy should never be stored on the same drive, or even in the same computer. Backup prevents data loss and should mean you will never need to pay for expensive data recovery solutions.
A quarter of PC users lose data every year, and 15% of all laptops are stolen or suffer hard drive failures, according to research by the Gartner Group. And research by PricewaterhouseCoopers and the DTI reveals that seven out of 10 small firms that do experience a major data loss go out of business within a year.
Despite the relatively high risk, many accountancy practices still do not back up their data properly. And all too often, even when data is being backed up, it is not verified until disaster strikes – and is then found to be corrupt or invalid.
Data back-up options
There are many ways you can go about backing up your data. Here are the most accessible options for accountants and small accountancy practices:
Secure online storage and backup solutions
Dropbox is probably the most widely known online storage service, with a paid-for business version called Dropbox Business. To use it, you first download some Dropbox software onto your various devices, including laptops, desktop PCs, Macs, phones and tablets. Then, whenever you copy a file to a particular folder on your computer (your “dropbox folder”), the Dropbox software automatically copies it to the cloud – and syncs to all your other devices. You can also access files from your computer even when you are offline, which means you can work from anywhere.
Dropbox Business adds to the mix some IT admin tools such as unlimited file recovery, device management, a complete audit log, remote wipe, sharing controls, strong encryption, two-step verifications, and much more. There are also hundreds of thousands of app integrations that can add further features – so, for example, you can edit documents using Microsoft Office or Adobe Acrobat; toughen up your IT security with solutions from IBM or Dell, or sign contracts using DocuSign.
Another major contender in online storage is Google Drive, a secure, reliable system that is also really easy to use. It is free for up to 15 GB of online storage for documents, spreadsheets, recordings, photos, videos and so on – all of which are stored in the cloud, and can therefore be reached at any time from your smartphone, tablet or computer. You can also easily share files with colleagues or clients if you need to work collaboratively.
Although Google Drive is not usually used as installed software, it can be: there is a downloadable version that works in the same way as Dropbox. If you need more than the free 15GB of space, you can upgrade to a paid cloud storage plan (currently $1.99/ less than £1.50 a month for 100 GB, or $9.99 / less than £7 a month for 1 TB). For $10 per user per month, Google Drive for Work gives you unlimited storage (or 1 TB storage for accounts with fewer than five users) for files, folders, backups and everything important. You can sync all your business files, including Microsoft Office files, across your computer, phone and tablet so that you can easily access all your work whenever and wherever you need it.
Alternative cloud storage options worth looking at include SugarSync, Box.com, Team Drive, Wuala and Microsoft’s OneDrive, amongst others.
Computing site Alphr has an interesting review of the three most well-known cloud storage options: Dropbox, Google Drive and OneDrive.
External hard drive or memory stick
Another option involves buying a portable external hard drive that simply plugs into your computer via a USB port and copies all the data over – although it is vital that you encrypt it. As we mentioned in Keeping your laptops and devices safe, it is not enough to simply password protect your computer. If someone gets hold of the external hard drive, they can place it in another machine and attempt to access all the data it holds, putting you and your clients at risk. As long as the external hard drive is encrypted they will be prevented from accessing the data. Some external hard drives have built-in encryption and incorporate a PIN keypad. The advantage with these is that no encryption software need be installed on your computer.
Memory sticks offer an alternative to an external hard drive, and also need to be encrypted in case you lose them, either by using built-in encryption or via encryption software. Memory sticks have the advantage of being small and easy to carry around, but at the same time this means they are easy to misplace or lose. Copying the odd important file onto a memory stick and carrying it around in your briefcase does not represent a well-thought out backup strategy.
Both of these devices are cheap to buy and can be ideal if you work in many different locations, sometimes without internet access. They do have their downsides, however. It is vital, for example, to store your main computer and the external hard drive/memory stick in two completely different physical locations. If you keep both of them in your office, for example, and you experience a theft or a fire, both copies will potentially be taken or wiped out. And while the external hard drive is compact and easy enough to carry around, there is room for human error whenever your backup process involves remembering to carry out the daily backup, and afterwards to take your external hard drive back to its separate storage location.
Depending on the backup solution you choose, there is also the added inconvenience of having to stop work on your computer in order to carry out the daily backup operation – and the whole process will take longer as your data grows in size. However, both Windows and OS X have built-in solutions that will function without you needing to wait.
In any case, always check that your backup has worked properly and that none of the data is invalid or corrupt.
Backups onto DVDs are another portable and cheap option. Like external hard drives, it is essential to store them in a separate location from your main computer and to verify that the backup has worked properly each time.
DVDs offer limited capacity (less than 5GB), but they are highly durable – with a lifetime of up to 30 yrs for DVD-RAM. They also make it easy to create multiple backups and to store them in different locations – but the flip side is this potentially leaves you more vulnerable to data theft.
While each of the solutions covered here has distinct advantages and disadvantages, online solutions probably offer the best fit for most accountancy practices. Affordable and easy to use, products like Dropbox offer peace of mind that your important documents are backed up in the cloud, and that any hardware disaster – be it a theft, a fire or any other physical loss – will not leave you high and dry.
* Information taken from Maindisc Data Recovery's website.