Accounting systems play a vital role in managing an organization’s financial operations effectively. But over the years there has been a rise in security concerns with on-premises accounting systems that need to be addressed. In this blog, we will delve into the vulnerabilities associated with on-premises systems and explore alternatives that allow businesses to enhance data security, accessibility, and compliance.
The Problem with Hardware
Accounting systems accumulate all of a business’s financial data, making them pretty big targets for unauthorized access, data breaches, and ransomware. Without robust security measures in place, sensitive financial information can be at risk. Physical security is also a concern, as theft, natural disasters, or accidents can compromise the infrastructure hosting the accounting system. Unauthorized physical access can lead to theft or destruction of data or disruptions in system availability. Moreover, organizations using on-premises systems often struggle to implement comprehensive backup and disaster recovery strategies or spend a small fortune on security and IT services. In the event of hardware failure or a catastrophic event, the absence of redundant systems or off-site backups can result in data loss and prolonged downtime.
The Cost of Upkeep
Ensuring the security of on-premises accounting systems also requires ongoing maintenance and updates. Organizations maintaining their own infrastructure often find it challenging to keep up with the constant release of security patches and updates, however, leaving their crucial accounting systems at risk. Failure to promptly implement updates and patches can leave on-premises accounting systems susceptible to hackers and open to easy exploitation. Additionally, these disparate systems often restrict accessibility and hinder collaboration, particularly for remote and overseas teams. Securely sharing financial data, collaborating on reports, or providing access to trusted stakeholders outside the organization can be cumbersome with an on-premises system, leading to inefficiencies and a decrease in data accuracy.
Some of the biggest downfalls of an on-premises system are compliance and audit challenges. Regulatory requirements and financial audits demand meticulous record-keeping, adherence to strict standards, and advanced data integrity. However, on-premises systems may lack built-in features to streamline compliance processes or facilitate audits, resulting in increased manual effort and potential compliance gaps. These shortcomings can pose financial and reputational risks for organizations.
To address the security concerns associated with on-premises accounting systems, organizations are overwhelmingly considering alternative solutions. Cloud-based accounting systems provide enhanced security measures, such as robust data encryption, regular security updates, and advanced access controls. These systems offer the advantage of secure remote access, enabling collaboration and productivity across distributed teams.
The Cloud-Accounting Difference
Cloud solutions also include automated backups and disaster recovery mechanisms, ensuring data integrity and minimizing downtime in case of system failures. Additionally, reputable cloud providers often undergo rigorous audits and comply with industry regulations, offering peace of mind and simplifying the compliance process for organizations.
Organizations must be cognizant of the substantial security considerations associated with on-premises accounting systems. The risks include data breaches, limited accessibility and collaboration, challenges in maintenance and updates, and compliance and audit complexities. By embracing modern cloud accounting solutions, organizations can protect their financial data, improve operational efficiency, and ensure compliance with industry regulations, enabling them to focus on their core mission with confidence.
So whether you are deep in research or are just starting to look, we would love to help you on your accounting journey. You can drop us a line at 855.913.3228 or fill out our simple web form and someone will reach out to you within one business day to schedule your free discovery. At Alta Vista Technology we take pride in being part of your solution!