Keep Your Accounting Information Safe from Cyber Threats
Snapchat. Dropbox. Yahoo! LinkedIn. Oracle. Cisco. Wendy’s. MedStar Health. Premier Healthcare. Verizon Enterprise Solutions. UC Berkeley. University of Central Florida. Internal Revenue Service. U.S. Department of Justice. There are some very big names in this list. Any idea what they have in common? The answer is frightening: all have been subject to cyberattacks… and that’s just in 2016.
The answer is frightening in part because of who was hit. The IRS and DOJ have the vast resources of the U.S. government behind them, yet they still fell victim. Oracle and Cisco are pedigreed tech companies. If anyone should be able to stop a cyberattack, it would be them, right? UC Berkeley and UCF are universities, not for-profit enterprises—where’s the financial gain in attacking them? But even more frightening is what a small portion of 2016 cyberattacks these organizations represent.
Small-to-Medium Enterprises Are Targeted Most
While high-profile attacks such as the 2013 theft of credit card data from Target make headlines, it is small-to-medium enterprises (SMEs) that are hit most often—about 4,000 attacks each day, or almost two-thirds of all incidents. In part this is simply because there are far more SMEs than Fortune 500 companies. However, the top reason cybercriminals favor SMEs is because they are usually soft targets, lacking the extensive IT departments and sophisticated hardware and software defenses of larger organizations.
Of course, sophisticated defenses don’t always help. The Snapchat attack occurred when employees responded to an email purporting to come from CEO Evan Spiegel that requested Social Security numbers and payroll data. Most SMEs, however, don’t routinely educate employees on cyber security, especially if they have no dedicated IT department
Cyberattack Costs Can Be Crippling
In addition to the frequency of attacks, SMEs are particularly vulnerable to cyberattacks because the costs to recover are often prohibitive. The Ponemon Institute reports the average recovery cost for a small business to be $690,000. For medium enterprises, the cost exceeds $1 million. For that reason alone, 60 percent of small companies that suffer a cyberattack fail within six months.
The costs are not limited to IT issues like recovering files, replacing hardware and software, and patching defenses. Depending on the nature of the data that is compromised, the business may suffer reputation damage with its customers from which it simply can’t recover. Even if the attackers ultimately do nothing with the data, the affected business will be expected to provide such mitigation as free identity theft protection to its customers, and of course litigation is an ever-present threat.
Protecting Critical Business Data
How would your company function if all its accounting data vanished one day? For some businesses, other key data such as customer lists or intellectual property may be vulnerable to cyberattack, but every company has an accounting system. One popular cyberattack is ransomware, which encrypts all files on the system until the victim pays a ransom to receive the decryption key. One small online retailer hit with Crytowall, a version of ransomware, paid $50,000 to recover its files… only to receive a key that didn’t work. Because it didn’t have a backup system in place, it had no other option for recovering its data. (That company closed down six months later).
One way to keep your accounting information safe from cyber threats is to place your data in the hands of a third party that specializes in hosting and data security. BroadCreek Group offers Xero to all of our accounting clients. This online accounting system stores your information safely in the cloud, providing protections from hardware failure, fire, natural disaster—and cyberattack. While there is no impenetrable defense against hackers, a company like Xero is far better protected than your business. Plus, with BroadCreek’s bookkeeping services, you can place your accounting in the hands of professionals, eliminating the need to worry about employees, accounting software, or cyberattacks.
Contact us today to learn more about our cloud-based accounting solutions.