Do you know the average cost of a data breach was $4.45 million in 2023? Everyday use of software, smart devices, and work technologies during business operations acts as a gateway for cyber attackers and increases the risk of data breaches. With the increasing number of data breaches and cyberattacks, securing payroll data has become a crucial task for all industries.
In the absence of data security best practices, it’s hard for businesses as well as enterprises to secure payroll data. That’s why Finsmart Accounting – trusted in India and abroad for accounting outsourcing services – decided to share 10 payroll data security recommendations from top accounting firms.
Let’s start!
Conduct a Payroll Security Audit
Conducting a payroll security audit can take time and effort but it will help you identify vulnerabilities in payroll management and data security. You can start by asking the payroll team what they do daily to learn about the security practices they are following and weaknesses in the process.
After conducting a payroll security audit, it will become easier to identify potential risks and implement security measures to secure payroll data.
Restrict Access to Payroll System
Giving payroll system access only to the payroll team helps businesses reduce the risk of data breaches. However, restricting access to the payroll system will not give you 100% assurance of payroll data safety. Regularly host data security training programs to teach your employees the best security measures.
The payroll team can also use two-step verification while logging into their system to ensure unauthorized people are unable to log in.
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Update Payroll Software Regularly
Businesses often forget to invest time in updating payroll software as this task is not on the list of top priorities. But do you know not updating payroll software regularly can lead to various security threats? Payroll software has protocols to prevent business data from getting leaked and if they are not updated, data breaches can happen.
Cyberattackers also develop new technologies for stealing business data, which makes it important to update payroll software regularly.
Protect Digital Documents
Digital documents containing confidential documents are on the top list of hackers. Password-protecting your digital payroll documents can help you eliminate the risk of online data breaches. Use updated payroll software to make sure documents are shared securely.
Don’t miss out on securing physical payroll data as well. Ask your payroll team in India to keep sensitive data files in their lockers and shred unwanted papers.
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Use a Password Manager
Creative yet strong passwords are essential for preventing cyber attacks on your accounting and payroll process. Because simple passwords can maximize the risk of cyber attacks, the challenge of remembering all the complex passwords emerges. That’s why using a password manager software can be a great help to create, store, and manage passwords, eliminating the risk of payroll data theft in the process.
Make sure to use a reputed and updated password manager to avoid unauthorized access to your accounting and payroll data. Google Password Manager has good capabilities
Implement Data Encryption
Data encryption helps make any piece of data unreadable and eliminates the risk of data leaks. We are talking about translating payroll data from plaintext to ciphertext. The only way to decrypt the data is by using the password that you have secured using Password Manager.
Cloud-based payroll software makes it easy to encrypt the data with just one click. Make sure this accounting and payroll data security tip is part of your cybersecurity plan.
Train Employees Regularly
The payroll team needs to learn every possible way of using payroll systems to secure data. Giving regular training to employees can help reduce the risk of human errors and protect every piece of sensitive accounting data. Educate your employees about the new updates and changes in the payroll processing protocols.
Divide payroll duties and make sure every employee is aware of their responsibilities to secure sensitive payroll data.
Outsource Payroll Services
Startups and growing businesses in India often struggle to keep their eye on business growth and payroll simultaneously. It gives cyberattackers a chance to steal sensitive data of employees and businesses. Outsourced payroll service providers use updated software and modern techniques to secure payroll data while processing the salaries and running other compliance chores.
Outsourcing payroll services will also allow you to spend more time for business operations without worrying about payroll and associated data security.
Use Separate Bank Accounts
Opening a separate bank account can help businesses reduce the number of assets at risk. Imagine if an employee commits a payroll fraud in your business, the risk of your loss will be limited if a separate payroll account has been deployed. Make sure that your payroll account has just enough funds to complete the payroll process.
Avoid adding extra funds to separate payroll accounts as it can defeat the purpose of accounting and payroll data security. Using a separate bank account will also simplify the audit process.
Secure Data When Employee Leaves
Most payroll data breaches happen when an employee gets fired or quits and still has access to the company’s payroll data. Quickly change the passwords and disable their access to payroll data and software that can let them connect with the business network.
Even if an employee is leaving on good terms, it is best to follow the same procedure to eliminate the risk of payroll data leakage and check security loopholes.
Amp Up Payroll Data Security with Finsmart
We hope that the above post helped you learn what top accounting firms in India and abroad recommend for accounting and payroll data security in India. While planning to partner with an online payroll service provider, make sure to check their online reviews, industry knowhow, previous work, and data security measures followed by them.
Have queries to ask? Send them to sales@finsmartaccounting.com and get them answered by our payroll and accounting experts.
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Founder & Director
Shalaka Joshi, a Chartered Accountant passionate about outsourcing and problem-solving, brings over 20 years of extensive experience in accounting, payroll, and MIS reporting to her professional endeavors
