How Safe is Outsourced Bookkeeping in the Clouds?

Recently one of your fellow readers submitted an excellent question about what we face as freelance bookkeepers when working virtually (from your own office rather than on-site in the client’s office)…

“I’d like to know how to address the concern of prospective clients who suspect that they will lose privacy when they outsource their bookkeeping to a back office business service company.  This is ultra important to closely held companies… Will they lose their privacy or are there ways to calm their fears?”

Clients with this concern are assuming that bookkeeping done on-site is more “private” than when it’s done remotely. Privacy is, in reality, more secure when it is done virtually using secure online tools in a paperless environment. But I’ll admit that that does seem counter-intuitive.

Your first hurdle is the client’s perception of what is private. And that really is an opportunity for you to identify whether this is a client that you really want to work with on a long-term basis.

Usually, the reason they *think* their info is safer in their office is because they can see and touch it themselves. They can also see the people who are working with that information. That seems to make sense. But in reality, when using proper online technology, their information is actually much MORE secure when outsourced than when keeping it in-house in the “traditional” paper-based way.

That’s because when appropriate cloud-based applications are used,  their financial information is stored more securely and privately than when it is handled in their office the “old fashioned” way. The biggest privacy risk, in reality, is with the PEOPLE who have access (or could have access) to their financial information, not WHERE those people are working.

Online software (including remote access tools) uses high level security encryption, which is actually safer than how these potential clients are likely handling their info in the office now. Online, only those authorized to see and use the information are allowed access. Security in a typical paper-based office is not so tight.

So how do you “gently enlighten” your potential client?

Ask them if they are comfortable in using online banking. Does that make them nervous? If it does, I’d suggest that this may not be a client you want to engage, unless you are willing to work onsite and and be paid less than your virtual colleagues.

In truth these days, all businesses face privacy risks. But those doing their bookkeeping in the “traditional” way actually are at HIGHER risk (Side Note: If you are handling their financial data, who do you think they will blame first when something goes wrong? Something to consider.)

When attending the Sleeter Conference last month, I learned that a full 33% of businesses experience fraud – usually due to paper checks.

Recently my own business account was subject to fraud. But not because of any online transactions or electronic information handling. It was because of a local vendor who did not protect my data taken from my PHYSICAL business debit card! And today I learned that one of my clients is currently going through the same inconvenience for the same reason with one of his business credit cards.

The reality is, secure online software is actually much safer than physical financial tools.

So, we are left with the last part of our colleague’s question: “…are there ways to calm their fears?”

YES! Use online technology with appropriate security!

When a client recognizes the value of outsourcing their bookkeeping, but needs some reassurance, make it easy on them (and you)!

• Transition them into virtual services one step at a time. The easiest way is with remote services. Their bookkeeping files can remain on their computer and you simply connect remotely to perform the work. (You will need to use digital source documents)
• Use online tools that are secure – don’t email QuickBooks data files or financial source documents. Use a secure file transfer service instead.
• If offering hosted QuickBooks services, use licensed, secure hosting solutions, not your own website hosting account.
• Consider using an online accounting solution by a trusted software company, such as QuickBooks Online for secure, anytime access to your client’s books.

You will need to determine your potential client’s online “tolerance” and choose the level of service that won’t feel “too risky” for them. Most of what they fear is just an illusion. Once they start to see the convenience and the built-in security, they will relax.

Of course, you may also need to accept that not all clients are ready to adopt new technology. When that happens, it raises a big question mark for you.

“Desktop accounting is on the road to becoming obsolete” – Randy Johnston, founder of K2 Enterprises

You need to be clear on WHO your ideal client is. If your outsourced virtual bookkeeping services are not a good fit for a client prospect, be willing to move on. The truth is, everyone is NOT well suited to be your client.

Bottom line – ALWAYS hold fast to the unfailing motto: win-win or no deal. If you do, both you and your clients will prosper!

Recommended Resources

SmartVault – a nearly all-in-one tool for virtual bookkeepers for secure document management and file transfer service that integrates with QuickBooks. You can get a free Lite account to see if it’s right for you.

Insider’s Guide to Your Own Virtual Bookkeeping Business – my comprehensive training course that shows you exactly how to get your own virtual bookkeeping clients in 30 days or less, along with ALL the tools you’ll need for working securely with your clients.

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Tagged As: bookkeeping in the cloud, cloud, online privacy, online secuity, outsourced bookkeeping, QuickBooks online, smartvault, virtual bookkeeping