Small CPA, Big Data Security: Navigating Offshore Partnerships with Confidence

With digitalization, data has become the king, especially for industries like accounting. They often deal with a torrent of financial information from clients of various industries. From tax records to payroll and general ledger to accounts receivable-payable – data comes in all forms.

The amount of data that the professionals have to deal with is directly proportional to the threat of data breach they are posed with each day. That’s why Finsmart Accounting – trusted by CPAs for outsourced bookkeeping solutions – is here with top data challenges and how offshoring can help CPA firms get secure. Let’s start with a quick security overview.

CPA data security overview

On average, it takes about 280 days to identify and contain a data breach, and the average cost of a data breach in 2023 was $4.45 million. This is a 15% increase in cost over the past 3 years. Stolen or compromised credentials of the employees are one of the top reasons for these breaches.

Small CPA firms receive malicious emails with attachments or links, along with invoices regularly. It has become extremely easy for hackers to attach such links in a way that they go unnoticed along with the workflow.

Outdated software and a team that is not equipped to handle such data challenges can be a nightmare for small CPA firms. With the right offshore partner, small CPA firms can not only manage a vast amount of data efficiently but also gain access to an expert team that helps in overall success.

What are the data challenges faced by small CPA firms?

When it comes to handling accounting for clients, small CPA firms face an explosion of data. Modern businesses are complex and so are their needs. Most of the data they handle are highly confidential and sensitive. Some of the top data challenges small CPAs face include:

– Volume of data: As small CPA firms continue to grow, there is an exponential growth in the volume of the data that is made accessible to them. Managing this data in-house, with a limited number of resources can be a daunting task.

– Security and compliance: There are a handful of legal and ethical responsibilities associated with handling critical data. Keeping up with the ever-changing regulations and complying with state laws can be challenging for small CPA firms while maintaining data.

– The additional cost: Managing data can be extremely expensive for small CPA firms. Considering the available infrastructure and skilled manpower, this can lead to overhead costs that can lead to an unnecessary splurge for businesses of this size.

– Scalability and growth: As small CPA firms gain more clients, the volume of data is bound to increase. The ability to store and manage data has to be at par with the expanding client base.

Now that you have an idea of the top data challenges faced by small CPAs, let’s read on to discover how offshoring can help small CPAs and accounting firms manage and secure data.

Data Management and Security While Offshoring

Offshoring provides multi-faceted benefits to small CPA firms. From cost saving to managing a huge amount of data to helping handle additional burdens during peak season – the advantages of an offshore partnership are many. Let us understand how can smart offshoring can help in managing and securing data for small CPAs and accounting firms:

1. Risk mitigation: Offshore partners have stringent security measures and compliance policies which are lacking in the in-house teams. Sending accounting jobs outside helps reduce the risk of data breaches, fraud, and non-compliance with regulations. Offshore partners often have a dedicated team who stay up-to-date with the regulations. The risk reduction is crucial when dealing with sensitive data like finances.

2. Access to expertise: Offshore partners mostly have a team of experts who can break down complex data security jargon for the leaders. This helps the team to evolve along with the regulations and combat security threats constantly. The experts ensure that the client data is handled well and is in sync with the best security practices.

3. Advanced security protocols: For offshoring partners, maintaining data security lies at the core of everything they do. With state-of-the-art security infrastructure, robust encryption, secure data centers, and regular audits, offshore partners help small CPA firms attain higher levels of security than they could achieve on their own.

4. Efficient backup and recovery: Leading offshore partners like Finsmart have efficient data backup and recovery solutions in place. This includes making the right use of the redundant data and ensuring a proper recovery plan in case of a data attack. This enables small CPA firms to recover as quickly as possible from such incidents.

5. Collaborative oversight: Communication is key when it comes to establishing an effective partnership between small CPA firms and an offshore team. By laying down the goals and expectations clearly for the offshore team, small CPA firms can achieve effective data management and security practices. Regular meetings, audits, and shared security objectives go a long way in achieving ultimate data protection.

Data Security for Small CPA Firms: Summary

Modern-day businesses have access to more information than ever before. This is especially true for small CPA firms. Every day about 2.5 quintillion bytes of data is being generated and it is a huge opportunity for accountants. Small CPA firms need leaders who can translate their part of the data into usable insights. With the help of offshore partners, small CPA firms can make their tasks easy. Offshoring reduces the burden of extra, additional labor and allows the team time to focus on data and its use. In fact, offshore firms, in recent times, also act as an advisory body that helps small CPA firms make better decisions.