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Protect yourself from an accounting record 'crash and burn'

by , 08 February 2013
Protect yourself from an accounting record 'crash and burn'With company financial year-ends just around the corner, you're probably working around the clock to make sure you're ready for the arrival of your auditors. And while you've probably got all your documents together, ready and waiting, have you thought about what you'd do if you lost all your accounting records? It would be a complete catastrophe. But if you have the right protection in place, it needn't be...

Murphy's Law is powerful!
If you're running late, all the robots on your way to work will be out. If you're in a hurry, that'll be the day your car chooses to act up.
When you're preparing your accounting records for your auditors, that's the time your otherwise 'reliable' computer will crash and you'll lose all your company's financial information.
When this happens, it's more than just frustrating. The loss of financial records for your company can have serious implications.
What are the risks if your business loses all its accounting records?
Losing your company's financial records could result in you being unable to carry on running your business. After all, your accounting records don't just contain information supporting your past transactions, they contain data you may need to make future decisions and transactions.
It also means you won't be able to prove that the financial information you supply to SARS and CIPRO is accurate. This could result in penalties and fines for your business.
That's why you need to make sure your accounting records are protected.
Here are three simple things you can do to protect your accounting records
Werner Swanepoel gives the following three suggestions for protecting your financial records in the Practical Accountancy Loose Leaf Service:
  1. Back-up your accounting records on a regular basis – if possible, at the close of business every day!
  2. Place back-ups of your accounting records on a device or medium other than the server on which you keep the master file – just in case that server crashes.
  3. Store your back-ups in a location other than the one where your server is based, in case of natural disasters like a fire or flood. That means having a protected off-site storage area where your financial records will be safe.
And remember, if you lose your accounting records, you can't simply correct this by recapturing the transactions – you're likely to miss something important if you do.
Start today! Put a safety plan in place to ensure your accounting records are protected and avoid this accounting nightmare.

If you want more information on Accounting records get your hands on the Practical Accountancy Loose Leaf. In the Practical Accountancy Loose Leaf  we've got a dedicated chapter on accounting records, in it you'll discover:
  • What are accounting records?
  • Checklist: What do accounting records generally consist of?
  • Why it's important for you to keep accounting records A
  • 3 risk areas to watch out for
  • Risk #1: Unauthorised access and manipulation
  • Risk #2: Manipulation of accounting information
  • Risk #3: Loss of financial information
Get your Practical Accountancy Loose Leaf here...

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