Not too long ago, we did business with paper. Paper invoices, paper receipts, paper bookkeeping records, etc. Now, we all use computers. In fact, our business (and personal?) lives are so "computerized" that if we lost our computer, we'd be up the creek without a paddle for sure!
What if you didn't "lose" your computer, instead, somebody got onto it and pulled off sensitive information about you, your business, your bank accounts, your customers, etc. What can you do to reduce the risk of that happening?
The main and most simple and effective (and still not used all the time) is having a strong password. Try out how strong yours is by going to www.howsecureismypassword.net. Change your password on a regular basis...at least once a year, preferably more often than that.
Don't leave your computer "open" when you step out. If you do, somebody could walk over, plug in a thumb-drive, and in a matter of minutes, have copied off all kinds of sensitive data. Best practice; activate the screen saver requiring a password to open back up. Set it to go on after 5 minutes of inactivity. This might seem like a hassle, but all it takes is for one of your customers to become a victim of identity theft due to you not guarding their private data on our computer, and watch the costs and fines rack up faster than an Indy 500 racecar.
Besides protecting against unwanted snoopers, everybody needs to make regular (preferably daily) offsite backups of their entire computer. This requires a fast and large portable storage device. Just have your hard drive crash once, or somebody steals your computer, etc. once and you will suddenly become a BIG believer in offsite backups. Of course, the obvious additional step is to test your backups to make sure they are really working. I know of a business that did regular offsite backups and then when their file-server crashed, they discovered the backups hadn't been working for months.
Finally, a good rule to remember about keeping track of all your accounting records on a computer is, just because you entered it into the computer doesn't mean it got recorded correctly. The key is having a competent bookkeeper (as part of the CPA firm who prepares your tax returns) looking over your data on a regular basis, not just once a year when they do your tax return. You need accurate information to run your business. The old saying, "Garbage In, Garbage Out" is still true. We recently helped some local businesses clean up their accounting records (on a computer) and for the first time in too long, they are discovering what business actions make them money and what are losing money. One client just realized a profit for the first time in over 5 years after cutting out the losing business activities based upon the accurate accounting records they are now getting.
Did you hear the one about the computer support technician who received a call from a frustrated computer user? After many minutes of discussion, it became apparent that the user was unable to see anything on their computer screen because the power was out in their building. Just goes to show that nobody's perfect.
Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459.
