4 Steps to Reduce Cybersecurity Risk in Automated Accounting

Accounting automation is transforming the way businesses handle financial tasks. The ability to incorporate automation allows organizations of all sizes to streamline accounting workflows, reduce data entry errors, and produce more insightful business calculations. But accounting automation carries risks as well. Over-reliance on automated systems creates vulnerability to system errors and exposes data to ever-present cyber risks. Businesses that experience data breaches due to cybercrime or other events can face huge costs through operational disruption, regulatory penalties, reputational harm, and other negative consequences.

With cyber threats rising exponentially, the data that small businesses rely on for everything from conducting routine operations to implementing strategic initiatives is increasingly at risk. The following best practices can help you recognize and effectively mitigate risks, positioning you to better protect financial data in an increasingly digital world.

1.         Quantify Your Cyber Risk

How much cybersecurity risk does your company face due to the increasing automation of accounting? Your risk depends on a number of factors. But at its core, cybersecurity risk can be estimated with a simple formula:

Conducting regular vulnerability assessments is an essential tool for maintaining a realistic awareness of your company’s cyber threats — but remember that the threats don’t stop at your company doors. Be sure to include potential supply chain risks in these assessments.

To understand the impact of a potential breach, consider the value of what you’re trying to protect. Do you collect and store customers’ personally identifiable information, such as credit card numbers? What types of payroll information, bank account details, and business intelligence are in your data files?

Consider the value of those assets not only from your company’s perspective, but also through the eyes of criminals, disgruntled employees, and competitors. Could they monetize your data or benefit in other ways if they gained access to it?

2.         Adopt Cybersecurity Practices to Protect Your Data

By consistently enforcing good cyber hygiene, you can dramatically reduce cyberattacks and other digital risks. When it comes to automated accounting platforms, some of the well-known cybersecurity practices include:

• Requiring two-factor authentication for all users
• Limiting user permissions to those functions needed to perform their role
• Reviewing approvals for spending and monitoring them often
• Ensuring a functional audit trail for all financial activities
• Maintaining end-to-end encryption whenever possible
• Applying patches and data security updates as soon as they’re available

A frequently overlooked but essential cybersecurity control is to closely manage accounting workflow rules to make sure data remains complete and accurate as it is processed or moved. For example, if you’re using automation to pull data from a database and add it to your reporting dashboard, you’ll need to strictly limit the number of users who can change the queries to pull the data. And if a change is made, then you should have a log or alert so that you can see the changes and exercise oversight.

Adequate human oversight of automated systems is vital. Errors often make their way into data, whether intentional or not. A human can spot data anomalies or illicit system access that may not register as problematic to a computer.

Because the human element is critical, every business needs to emphasize and enforce consistent application of cybersecurity practices. Train all staff on basics like how to spot and respond to phishing attempts appropriately.

Finally, do your due diligence to select a trusted automation provider. Whether you’re considering automated bookkeeping or advanced business accounting solutions designed to handle complex financial reporting, your choice of provider meaningfully impacts your risk.

3.         Consider Outsourced Accounting

Another effective way to reduce the risks — and the costs — of automated accounting is to adopt an outsourced accounting model. Outsourced accounting lets you take advantage of automated accounting features without repeatedly making the substantial investments needed to keep up with changing technology standards.

Again, it’s important to choose the right provider. A reliable outsourced accounting provider will apply robust cybersecurity practices and provide excellent visibility into workflows. They’ll also be able to help you achieve seamless integration into your existing accounting workflows for maximum convenience and security.

4.         Balance Automation and Risk Management for Peak Performance

Accounting automation offers streamlined workflows and improved accuracy that help your business get ahead, but it requires careful risk management. The cybersecurity advisors at CRI can help you assess the risks of your accounting systems and show you how to keep your company safer in the digital age. Contact us today to find out how we can help you reap the rewards of automated accounting without excessive risk exposure.