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Topics: bookkeeping, bookkeeping outsourcing, outsourced bookkeeping services

Data Security Guide for Bookkeeping Outsourcing: Best Practices for CPA Firms

6 MIN READ | Posted on September 06, 2022
Written By Divya Ramaswamy

Data security guide for bookkeeping outsourcing: Best practices for CPA firms

CPA firms throughout the country have been delegating key functions such as bookkeeping to outsourced bookkeeping companies in an attempt to cut costs and gain access to highly skilled resources. While bookkeeping outsourcing has proved to be highly beneficial to accounting firms in several ways, it also raises data security concerns. As the accounting world becomes more dependent on technology for operations and data exchange, the last thing they expect is a data breach.

Data security and confidentiality should be a significant concern for accounting firms as they deal with sensitive information pertaining to the financial as well as personal data of their clients. Employing robust data and cybersecurity measures is crucial at all times. Data breaches seem to be increasing at an alarming rate every year, and nobody feels immune from such attacks. Per recent statistics, 8 out of 10 Americans fear that businesses cannot secure their financial information, and it is estimated that data breaches have an average cost of nearly $4 million globally.

Accounting firms looking to outsource bookkeeping wonder what happens when they turn their financial data and sensitive client information to a third party.

But the good news is that you can take steps to protect your data and ensure that you have partnered with a bookkeeping outsourcing services company that is also doing the same. Read on to find some data security best practices you can follow while working with an outsourced bookkeeper.


Data breaches refer to the loss of control, compromise, unauthorized acquisition or disclosure, access of unauthorized purpose, or access to physical and electronic data. Stolen or weak credentials cause most cases of data breaches. Security best practices are crucial in all business areas but are especially important in areas where accounting automation is involved. Regardless of your accounting firm’s size, you should adhere to basic security best practices. 

From implementing VPN, installing anti-virus software, and running regular data backups, to encrypting sensitive data, setting employee access levels, multi-factor identification, and maintaining strong passwords that are regularly updated, top bookkeeping outsourcing services companies follow some best practices to ensure data security

Before signing up for bookkeeping outsourcing services, please discuss with your potential partner their data security practices.


Let’s start with the basics: restrict access to the physical space where your client information is stored. Most outsourced bookkeeping services providers ensure that no unauthorized individuals are strolling into their accounting office using employee key cards, visitor logs, badges, and security cameras. With remote working possibilities, accounting firms should also ensure that the devices used are physically secured. 


Storing data on USB devices like pen drives might bring the convenience of carrying your work anywhere. But you cannot overlook the cross-contamination of malicious code that can spread when you plug such devices into an external device infected with malware. Also, there are chances that such flash drives might get stolen or misplaced. It is best to avoid storing and using sensitive client data on portable storage devices as they come with a very high risk. 

And when it comes to data disposal, “out of sight, out of mind” is inapplicable. Data discarded in a bin might be open to anyone, so it is imperative to follow certain protocols while disposing of critical client data. CPA firms should carry out data disposal regularly; those on paper formats should be shredded using a paper shredder and erase those stored in electronic form.


Passwords are undoubtedly the first line of defense against illegal access to information, and strong encryption ensures that your sensitive data is protected. They also help protect against the mishandling of data. Having a solid password policy enables that line of security, and it is, therefore, crucial to have a mandate that needs updating passwords regularly. It is important to set strict requirements for employee passwords regarding length, complexity, and lack of predictability. 


Moving to cloud technology can ensure data safety as your client’s data won’t be stored in physical systems where it could be stolen, mishandled, or perhaps even accidentally deleted. When critical data is stored remotely on secure servers, all the application functions can be performed off-site. Not only does it cut costs, but it also ensures access to the most secure version of the software used. Also, the cloud provider completes backup and provides airtight data security, and there will be no need o download or install anything on personal computers. 


Cyber essential certifications ensure a baseline of cybersecurity by identifying fundamental technical security controls your accounting firms should implement. Not only does it help defend against internet-borne threats, and it covers data, programs, computer servers, and other elements included in your firm’s IT infrastructure. The cyber essentials scheme focuses on internet gateway, access control, secure configuration, boundary firewalls, malware protection, and patch management. 

ISO 27001 is an international standard that provides information security management system (ISMS) specifications for security controls that encompasses people, process, and technology. Such measures ensure that the data assets are secure, especially financial information, intellectual property, and other details and information.


Outsourced bookkeeping services are here to stay; therefore, the security challenges that remote work poses should be managed long-term. It is essential to create company policies that must be communicated with staff and vendors to ensure data security at all times. It is important to ensure that you know what is being done with the data that is shared externally, who else has access to it, how it is stored, and how it is transmitted. Please pay particular attention to your bookkeeping outsourcing company and their outsourced staff that has access to your most sensitive data.

Let’s be direct- data security and confidentiality carry the heaviest weighting in outsourcing decisions, and is why accounting firms decide to transition to outsourced bookkeeping services. Doesn’t it make sense to hand over your bookkeeping to an outsourced bookkeeping services company that always ensures comprehensive data security measures? 


As you can see, offshore bookkeeping services can be a great option for CPA firms, especially accounting firms concerned about data security. When partnering with an outsourced bookkeeping services company, find out if they follow world-class security standards such as ISO 27001 and 9001, are SOC-2 compliant, and are cyber essentials certified.

MUST READ: The Definitive Guide To Outsourced Bookkeeping Services


QXAS is one of the most preferred outsourced bookkeeping services companies that ensures comprehensive data security. We at QXAS understand the value of data security and realize how it enables building trust with our clients. That is why we go the extra mile to procure certifications such as ISO 27001 and 9001 and stay fully compliant with all the essential rules and regulations.


  • World-class data security measures: Our outsourced bookkeeping services leverages an IT infrastructure with ISO 27001:2013 certification for data security management systems.
  • Choose from 100+ expert offshore bookkeepers with a minimum of 5+ years of experience.
  • Save substantially- up to 50% off on operational costs.
  • Fully compliant: SOC 2 Type II compliant accounts outsourcing services company
  • Build immediate capacity: Onboard certified, dedicated, outsourced bookkeepers to your team within 48 hours.
  • Use the time saved to innovate, grow and increase scalability.
  • Flexible engagement models to suit your firm’s requirements

Book a Consultation

We hope you enjoyed reading this blog. Schedule a call now to find out how our offshore bookkeeping services can help your CPA firm grow and scale quickly while ensuring data security.

Originally published Sep 06, 2022 01:09:18, updated Sep 06 2022

Topics: bookkeeping, bookkeeping outsourcing, outsourced bookkeeping services

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