Imagine one day your accounting system shuts down and there is no backup. You no longer have a list of customers, vendors, invoices or bills. In fact, you may have lost all records of revenue, profitability, sales tax collected, and payroll source deductions calculated. This would not only make it very difficult to operate your business, it would make filing taxes a nightmare.
If your business, bookkeeper, or accountant maintains this important information, I recommend you insure there is a proper backup plan in place. A good rule of thumb is the 3-2-1 backup plan which keeps 3 copies of data on 2 different media with at least 1 offsite.
Small business data can be stored in a variety of places including a POS system, bookkeeping system, accounting system, and tax filing software. Most reputable cloud based systems have policies in place to backup data in real-time.
Small unsophisticated bookkeeping companies are at a higher risk of data loss. If they are not using a cloud provider, ask if they have a backup plan. How many copies of your file are being maintained? How current is each backup? Are they password protected, encrypted, on-site or off-site?
Take the time to ask the questions, after all it’s your business, your data, and your risk.
