When an accountant makes a mistake, the consequences can be far-reaching – for them and their client.
Accounting is one of those professions that calls for the utmost security and privacy. So, when it’s time to share files, the process has to be watertight. That’s just one of the reasons why secure file sharing for accountants is such a hot topic.
In years gone by, sharing important accounting information via email might have sufficed. But there are efficiency and security issues that make this medium inappropriate for modern-day accounting practices.
Even when file-sharing platforms are used, there is still potential for costly mistakes – either because the software isn’t all that good or it isn’t being implemented correctly.
Either way, it’s a good idea to know what the most common accounting file-sharing mistakes are so you can avoid them!
But first, let’s take a look at the reasons why secure file sharing for accountants is vitally important.
Why Secure File Sharing for Accountants Is Important
Accountants handle sensitive data such as financial statements, tax documents, and payroll information on a daily basis.
According to the International Monetary Fund (IMF), the financial sector accounts for nearly one-fifth of reported cyber incidents globally. For accountants, a single breach could mean costly fines, compliance violations, and significant reputational damage.
Using unsecured tools such as outdated file-sharing software or unencrypted emails increases the risk of data being compromised.
Secure file-sharing platforms with encryption, multi-factor authentication (MFA), and audit logs can prevent breaches. These tools not only protect client data but also help firms meet legal requirements and maintain trust.
Common File-Sharing Mistakes Made by Accountants
Any of these risks have the potential to cause catastrophic damage to an accountant’s reputation. Unfortunately, some accounting firms are making two or more of them – exposing their clients to potential litigation and fines.
1. Sharing Files Via Unsecured Email
Sending sensitive financial documents via standard email poses significant security risks. Emails often lack proper encryption, meaning that any intercepted communication can be easily accessed by hackers.
Unsecured email is a common entry point for cybercriminals looking to steal sensitive client data. Additionally, phishing attacks often exploit email systems to gain access to confidential information.
2. Not Password-Protecting Sensitive Documents
Without password protection, even encrypted files are vulnerable to unauthorized access if they are intercepted.
If someone gains access to a password-protected file, they can easily view, modify, or misuse the data. This could lead to significant data breaches, loss of client trust, and potential legal consequences.
Secure file sharing for accountants requires collaboration software that offers encryption, multi-factor authentication or Magic Links, and a range of other security measures. The stakes are just too high not to have them in place at all times.
3. Using Obsolete Accounting File Sharing Software
Outdated software poses a serious security risk due to its lack of security updates and support.
Old software versions may have unpatched vulnerabilities that hackers can exploit to gain unauthorized access to sensitive data. This includes operating systems, email clients, and file-sharing applications that haven’t received security patches.
Continuing to use outdated software increases the likelihood of security breaches and may lead to compliance issues, especially for firms that must adhere to strict regulatory requirements.
4. Failing to Implement Client-Specific Permissions
Have you ever accidentally sent a client someone else’s sensitive information? It’s easily done when you’re overworked and stressed out, but it can have catastrophic consequences for your client and your business.
Without proper permission settings, there’s a chance that files could be shared with individuals who shouldn’t have access, leading to potential data breaches and violations of privacy regulations.
For example, sharing a client’s financial statements with an unauthorized team member or a third party can result in severe legal consequences and loss of trust. Your disgruntled client is likely to tell everyone they know about the security breach, which could make doing business very difficult.
5. Not Training Staff on the Basics of Secure File Sharing for Accountants
Human error is one of the leading causes of data breaches, and without proper training, employees may unknowingly make mistakes that compromise security.
Whether it’s sending the wrong file, using weak passwords, or failing to verify recipients, these errors can lead to significant data leaks and security issues.
Staff members who aren’t aware of secure file-sharing practices may also fall for phishing attacks, inadvertently giving hackers access to sensitive information.
Make sure all your employees are fully trained in secure data management practices – and the use of your chosen accounting file-sharing platform.
6. Sticking with Single-Factor Authentication
Relying on a single password for securing sensitive files is no longer sufficient. Hackers are increasingly adept at bypassing traditional security measures.
Without multi-factor authentication (MFA), attackers can easily access accounts with minimal effort, putting client data at risk. The lack of MFA creates a weak point in your security system, making it easier for unauthorized users to compromise files.
There’s a new, more secure alternative to MFA that involves a sign-in link sent to a nominated email address. In simple terms, if you don’t have access to the email account, you don’t have access to the file-sharing platform.
7. Failing to Manage File Access Properly
When sensitive files are shared, it’s crucial to monitor who accesses them and when. Without monitoring, unauthorized access can go undetected – leaving your accounting firm vulnerable to security breaches.
Hackers or disgruntled employees could gain access to confidential documents and alter, steal, or misuse the data while remaining unnoticed. The failure to track file activity can result in compliance issues, loss of trust, and serious legal repercussions.
There’s a Simple Solution for Secure File Sharing for Accountants
It’s called TeuPortal, and it’s an affordable, user-friendly file-sharing solution that’s perfect for accountants and accounting firms. To learn how it can transform your business and scale up as you grow, contact the TeuPortal team today for an initial consultation.