There are three major risk areas when it comes to accounting records:
• Unauthorised access;
• Manipulation of financial information (i.e. When someone makes unauthorised changes to the information in the accounting records); and
• Loss of financial information
Today we want to address the issue of loss of financial information:
Let's have a look at it in more detail.
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Be aware of the fact that you could lose your financial information due to natural disasters (floods or fires), computer hardware or software failure, or even manipulation or deletion by hackers.
Also, note that you can't simply correct the loss of financial information by recapturing the transactions.
After all, it's seldom evident exactly when the loss occurred and which transactions were included in the financial records and which weren't. This is, of course, assuming that only a portion of the information has been lost and not all of it.
But what are the consequences to your business if you lose financial information?
Moreover, you risk losing the ability to carry on running your business!
Note that all the information supporting your past transactions will be lost, as well as data you need to make future decisions and transactions. And if you can't prove what they owed you, customers are unlikely to pay their accounts.
Another consequence of losing financial infomation is that you won't be able to prove that what you gave SARS and the CIPC is accurate. This could mean penalties and fines for your business.
Here's how to protect your accounting records from the loss of financial information
• Use a simple method: Better safe then sorry so make sure you back it up on a regular basis – if possible at the close of business every day!
• Make back-ups on a device or medium other than the server on which you keep the master file – just in case that server crashes.
• As a final step, store your back-ups in a location other than the one where your server is based, in case of natural disasters.
Protect your company against the risk of losing the financial information! As we've shown you, the consequences aren't worth it.