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Blog » Addressing Data Security Risks in Outsourcing Accounting Services

Addressing Data Security Risks in Outsourcing Accounting Services

Last updated: 24 Jan, 2024 By | 6 Minutes Read

Outsourcing Accounting Services

Data security stands as a paramount concern for companies venturing into the realm of outsourcing accounting services. In an era where data breaches occur at an unsettling pace, targeting not only high-value entities but also small and medium-sized businesses (SMBs), the decision to outsource accounting functions becomes a strategic move driven by the imperative of safeguarding sensitive information.

As the specter of cyber threats looms, the need to fortify your company’s data protection measures takes center stage. The data security landscape is ever-evolving, demanding a comprehensive approach to shield against potential risks and vulnerabilities. In this blog, we will delve into various tactics and strategies that businesses must consider to establish a robust defense mechanism, ensuring the integrity and confidentiality of their data throughout the outsourcing process.

Let’s explore the proactive measures beyond conventional safeguards, empowering your organization to confidently navigate the outsourcing landscape without compromising data security.

Mitigating Data Security Risks by Outsourced Accounting Services

Review Your Internal Security System:

Security starts in your own yard. Take a look at your data generation, compilation, and storage platforms to rope in possible leaks. These kinds of leaks can be a result of insufficient controls over accessibility with a lot of staff members provided free rein over private or sensitive data for the reason that they belong to a particular division.

Small enterprise accounting procedures might be wanting with regards to protecting data on account of the inaccurate idea that the company is very small of a target for detrimental hacking. Gather only data that you essentially require to enhance records management and boost retrieval when you require it.

Whenever you use accounting services to an expert company, having a rational and process-driven strategy of collating data is necessary for guaranteeing a potent association. Make use of database supervising gateways and firewalls to put a stop to misuse of privilege and exploitation of system vulnerabilities internally as well as from the outside.

  • Enhanced Data Management Practices:

Small enterprises often underestimate their attractiveness as targets for cyber threats. Streamline your data collection process, gathering only essential information to improve records management and retrieval efficiency. Adopt a rational and process-driven approach to data collation, emphasizing the importance of accurate record-keeping.

  • Implementation of Database Monitoring Tools and Firewalls:

Ensure robust database monitoring gateways and firewalls are used to prevent unauthorized access and exploitation of system vulnerabilities. This step is crucial for both internal security measures and protection against external threats.

Study the Contractor’s Security Procedures:

It surely is not sufficient that the accounting outsourcing services you are contemplating have by no means been a data breach victim. You have to figure out, ideally with paperwork and written proof, as much as you can regarding the company’s physical security, data administration and records disposal procedures. This is a three-step technique:

1) Surveillance for Physical Establishments or Remote Access Locales: 

Access points to all of the data need to be protected. This consists of imposing limitations on remote access settings, handling data entry and exit areas and developed user-level permissions to limit accessibility. Outsourcing will probably lower the dependence on paper-based data and cut down on the susceptibility of printed details.

2) Staff: 

The accounting services adherence to customer security are in a position to clarify the powerful verification and recruitment procedure for their staff, particularly people who are going to have accessibility to your files. Staff members ought to go through comprehensive checks and be frequently evaluated to make sure conformity with rules and specifications.

3) Computer Systems and Technologies:

Data servers need to be situated in safe facilities with sufficient activity tracking systems available. Each and every process needs to undergo various levels of user authentication. Similarly, external storage resources, such as USB, DVD and drives have to be incapacitated to avert illegal accessing of client data.

However, if you are looking for a trustable accounting outsourcing firm, then look no further than Cogneesol! We understand your security concerns and ensure you great data confidentiality by guiding you through our company’s standard and protocols.

4) Regular Security Audits:

Implement regular security audits to assess the effectiveness of your security measures. This ongoing evaluation helps identify potential weaknesses and allows for prompt corrective action.

5) Encryption Protocols:

Implement strong encryption protocols for data in transit and at rest. This adds an extra layer of protection, ensuring that the data remains unintelligible even if unauthorized access occurs.

6) Incident Response Plan:

Develop a robust incident response plan that outlines the steps that you should take in case of a security breach. This plan should include communication protocols, containment strategies, and recovery procedures.


By incorporating these additional measures, businesses can reinforce their data security framework and instill confidence in their outsourcing partnerships. As the outsourcing landscape evolves, staying vigilant and proactive is key to maintaining the integrity of sensitive financial data. If you are looking for an outsourcing accounting partner, Cogneesol is here to assist you.