As a bookkeeper or accountancy business, you may handle sensitive financial information on a daily basis. This makes you a prime target for cyber-attacks and frauds. In this article, we’ll discuss the risks that bookkeepers face and strategies on how to protect yourself and your clients from them.

Why Bookkeepers & Accountants Are At Risk?

Bookkeepers and Accountancy businesses are high-value targets for cybercriminals because they have access to sensitive data. Hackers can use this information to commit frauds, steal money, or deploy malware.

Smaller firms are more likely to be targeted as they are seen as weaker prey. But cyber attacks can cause financial loss and reputational damage for any business.

Cybersecurity Considerations For Accountants & Bookkeepers

Source: The Association of Accounting Technicians

The Journal of Accountancy states that small and medium-sized accounting firms are often primary targets for data theft because they typically host sensitive client data and can act as gateways to larger or more prominent parties.

Earlier this year, in Feb-23, the UK’s Information Commissioner’s Office (ICO) gave a call to action to all accounting firms to help their SME clients comply with data protection laws.

It is important to note that cybersecurity threats, attack types, and ramifications differ from company to company, and the potential to experience a cybersecurity attack covers every business. Therefore, it is crucial for every member of your team and your clients to know how to protect themselves and the business.

Which Areas Are Bookkeepers & Accountants Most Vulnerable At?

Bookkeepers/Accountants are most vulnerable to cyber attack in the following areas:

  • Technical vulnerabilities in software and hardware tools used or general inadequate cyber hygiene in IT setup and practices.

  • Operations (inhouse and outsourced) where staff awareness around cyber good-practice maybe deficient or absent.

  • Rising costs – as businesses struggle to manage costs in a worsening economy and rising inflation, cybersecurity is likely to suffer, with budgets reduced or eliminated altogether.

  • Assumptions around IT service provider – most SME businesses, especially in the professional services area, will have innate assumptions that cybersecurity is covered as part of the service they are getting.  In 90% of the cases that simply won’t be true.

  • 3rd party partners/vendors risk around handling of sensitive information and their genereal security posture.

  • Clients’ lack of awareness and the potential for inadvertent mishandling of sensitive information.

4-Pronged Protection Plan:

The 4-pronged protection plan is a simple yet effective way to improve cybersecurity for bookkeepers. It consists of three steps; educate, assess, and implement.  Here’s a brief overview of each step:

  • Educate: The first step is to educate yourself and your clients about the common cyber-attacks and risks that bookkeepers face online. This includes phishing scams, malware, ransomware, and social engineering. You can use various resources such as online courses, webinars, blogs, and podcasts to learn more about these threats and how to prevent them.
  • Assess: The second step is to assess your current security posture and identify any vulnerabilities or weaknesses in your systems and processes. You can use various tools such as vulnerability scanners, penetration testing, and risk assessments to evaluate your security posture. You can also seek professional help from cybersecurity experts to conduct a thorough assessment.
  • Optimise: Maximise the effectiveness of your existing security controls and measures before investing in additional layers of security solutions. Furthermore, consider adopting free security resources before exploring new market solutions, which may be cost-prohibitive for small businesses.  Apply good judgement and invotative thinking in order to obtain the best from your existing security controls or free resources.

  • Implement: The third and final step is to implement the necessary security measures to protect yourself and your clients from cyber-attacks. This includes adopting a cybersecurity good-practice framework that props technical as well as administrative security hygiene. For example:

    • Making it company policy to implement 2-Factor-Authentication;
    • Establishing a robust and dependable data-backup solution;
    • Train your staff and clients on security good practices;
    • Monitor your systems and networks for any suspicious activity.

Best Practices and Expert Advice:

Here are some quick and easy actions that bookkeepers can take to enhance their security:

  • Adopt standards for your technical security hygiene – use the Cyber-Essentials standard as a baseline to comply with. Or alternatively consider the international standard ISO27001.

  • Manage access to your systems well.  For example:

    • Establish robust access-management procedures for all sensitive business systems and data to mitigate any risk of unauthorised access.
    • Implement multi-factor-authentication for all systems to reduce opportunity for unauthorised access through compromised passwords.
    • Consider the use of a password managers that helps you generate, store, and manage strong and unique passwords for all your accounts. It eliminates the need to remember multiple passwords and reduces the risk of password-related attacks such as brute force and dictionary attacks.
    • Consider emerging passwordless solutions.  For example, Passkeys are a passwordless authentication method that use unique digital keys stored on your device to sign in to your accounts. They offer benefits such as improved security, reduced password fatigue, and resistance to phishing attacks
  • Establish a data governance regime. Ensure you have an effective policy and practice for managing data from cradle to grave; managing it as it is created, processed, stored, transferred or deleted, to ensure the risk of compromise is minimised.

  • Test assumptions about your security posture on regular basis. Either conduct internal security audits on periodic basis or have a specialist independent party conduct technical vulnerability tests on your environment to idnetify any weaknesses or gaps before the bad guys do.

  • Prepare incident-response measures. Create and test pragmatic and effective incident-response plans to minimize the impact of successful attacks.

  • Consider cyber insurance. Cyber insurance is can offer last line of defence if you suffer a cyber incident.

Accountancy/Bookkeeping SMEs interested in an initial cybersecurity posture assessment, please contact us for a simple and cost-effective 2-hour online assessment to highlight any gaps.