As a small business owner, you keep accounting records for financial planning and legal compliance. Some records have confidential information about your business, clients, and employees.
You need to protect the information in your accounting records from damages, thefts, and natural disasters. Try these four simple steps to secure your accounting records.
Step 1: Store paper records safely
Do you keep accounting records in old, broken filing cabinets? Or, do you stack them on open shelves? Neither scenario is ideal for keeping your information safe. Broken storage containers and open shelves make your records vulnerable. Protect paper documents with a clean, sturdy filing container that locks.
You need to protect your paper files from water damage. Let’s say you leave your files on the basement floor and a storm floods the basement, ruining your records. Don’t store paper documents where they could be exposed to water.
Also, protect paper records from fire damage. Keep paper away from electrical rooms and equipment that uses heat (e.g., welding tools). You can use storage containers and filing cabinets that are fire resistant and waterproof.
Step 2: Make copies
Copies serve as a backup in case your original records are lost or destroyed. You could make physical copies or scan digital copies. Store one set of records in a different location than the other set. That way, you don’t risk losing both sets at the same time.
Sometimes, you do lose documents before you can make a copy. In that case, find out if there is a way to get a copy from the source. Often, you can get copies of your submitted IRS forms for small business with a request. If you are missing a tax return, use Form 4506 to request a copy from the IRS.
Step 3: Protect desktop records
If you store some types of business records directly on your computer, you need to set up security programs on the device. Install antivirus software on your computer to protect your desktop records from malicious software.
You can only access desktop records from the computer you stored the files on. If your computer is damaged, you could lose your information. Copy backup records on an external drive.
If you get rid of an old computer, remove your accounting records from the desktop. Don’t just delete the files. You need to wipe the drive to remove the data from the computer.
Step 4: Keep accounting records online
You can access cloud accounting software from the Internet. That means you won’t lose your records if your computer gets damaged. You store your information in the cloud, and you can use different devices to access them.
Cloud-based accounting software for small business takes measures to protect your information. For example, it encrypts your data the same way banks do. Use a strong password for your online accounting and keep it hidden from others. Also, use antivirus software to protect your computer from a virus.
Do you need an easy way to track your business’s transactions? Patriot’s online business accounting software is made for the small business owner. Save your time and money with the simple cash-in, cash-out recordkeeping system. Try it for free today!