Accountants and bookkeepers handle an immense amount of sensitive paperwork, perhaps more than most professionals. Therefore, it’s understandable why so many try to set up specialized systems for keeping workflows efficient and accessible – which isn’t always as easy as it seems.
Moreover, there is the matter of security. Whether stored physically or digitally (e.g., in the cloud or on local hard drives), financial and accounting information is extremely sensitive, and, unfortunately, highly desirable for would-be criminals.
In this article, we’ll explore a few more reasons why improving document security and workflow efficiency in accounting is so important, and share a few ways you can strengthen and streamline your operations.
Why Secure and Efficient Document Handling Matters for Accounting Professionals
Firstly, cybercrime is immensely costly in the financial sector. It’s estimated that companies in our industry lose an average of $6 million, annually, just to recover from data breaches. That not only covers the cost of restoring documents and resecuring systems, but also recouping losses from drops in business through waning reputation, operational slowdowns, and compliance fines.
On that note, accounting professionals must adhere to compliance standards, such as the General Data Protection Regulation (GDPR) for European Union clients, to avoid falling foul of large-scale reputational damage and heavy fines.
And this is all from a financial perspective – failure to secure and streamline document handling effectively can legitimately slow down your working process from day to day. Accountants with lax document-keeping systems struggle to find important files and folders, have difficulty meeting deadlines, and risk of letting clients down.
No accountants can afford to lose business – especially those who operate freelance or individually. Therefore, improving your documentation handling processes can boost your chances of avoiding data loss and fraud. You can achieve this by taking steps like digitizing important documents and regularly auditing your access controls.
Key Challenges in Document Security and Management for Accounting Teams
In a perfect world, accounting teams and professionals would all find streamlining and securing their sensitive documentation immensely simple. However, consider the sheer number of files and clients you process regularly – it’s little wonder that almost seven out of ten accountants feel they spend extortionate amounts of time on hunting down documents.
Some portion of this is down to poor solution implementation. Drawing on the same study linked by CPA Practice Advisor above, almost half of all accountants surveyed feel they use a “broken” document management process. “Broken” can mean a few different things – perhaps slow, disconnected, or simply not fit for purpose.
Some common mistakes accountants and bookkeepers face when addressing documentation challenges include:
- Failing to encrypt or secure data effectively with strong enough passwords
- Keeping documents entirely offline and misplacing them
- Failing to set up an accessible data security policy for all personnel to follow
- Fragmenting files across multiple systems, servers, and storage units
- Neglecting data backups and disaster recovery solutions
- Underbudgeting for data security or avoiding professional solutions for the sake of saving money
- Failing to train personnel effectively on data security and management best practices
The last point here is particularly important for accounting firms – with around 75% of all businesses cross-industries failing to train people effectively on social engineering risks, and 45% avoiding basic email security training.
Actionable Tips to Strengthen Document Security and Streamline Daily Operations
Strengthening and streamlining accountancy documentation practices will look slightly different for every firm. However, there are a few actionable steps you can take immediately to improve your document handling to keep data secure, compliant, and accessible
- Digitize all your paper records into a single source or platform, accessible through secure passwords and multi-factor authentication
- Regularly update all software and cybersecurity protection you have in place overseeing your documents
- Use a workflow platform that helps you to automate and sort document filing, meaning you don’t lose track of invoices, client tax returns, and other crucial documents as and when they are generated
- Choose accounting software that integrates seamlessly with your existing applications and systems, reducing the need for manual checks and sorting
- Create a training program for general data cybersecurity that you encourage your accountants to refresh on regularly
- Try to centralize your data (and your clients’ data) in a single, cloud-based platform with industry-standard access controls, and with a cloud provider that offers proven support for accountancy firms
- Regularly audit the data you keep and securely remove and shred any financial data you don’t need to hold onto (therefore, for example, helping you to stay compliant with PCI DSS if you process card payments)
Best Practices for Long-Term Compliance in Document Management
Of course, the steps mentioned above only address immediate issues. For long-term document management streamlining and security, you need to create a strategy that helps you to keep in step with accountancy compliance and ensures you’re at low risk of data loss and theft.
Here are a few long-term tips to consider:
- Run regular cybersecurity assessments with professionals (such as PCI penetration testing) to ensure your systems are robust against attackers and data leakage
- Create a culture of security and data protection – ensure all accountants working under you understand their accountabilities and how to safely handle and access financial data
- Regularly audit access controls (such as by changing passwords and user access for sensitive documents)
- Aim to gradually digitize all physical documents and create an automated backup system
- Audit the third parties and integrations you work with to ensure they align with your security and accessibility standards
- Establish and adhere to a clear documentation retention policy that declares when it is safe to dispose of data and when necessary to retain it
Conclusion: Smarter, Safer Document Management for Modern Accounting
Streamlining and securing your accountancy records may seem simple enough on the surface – after all, document digitization has become easier to handle over the years. However, your own ease of managing these documents will depend on where you are starting from – are you starting from scratch, or do you need to completely rearrange your data silos?
Regardless of your starting point, the best practices for short- and long-term accountancy documentation management will help you stay compliant, save money, and protect your reputation in the public eye.
