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 Data Security in Cloud Accounting: Best Practices

What is cloud accounting?

You maintain your company’s books online when using cloud accounting. This includes a list of assets, liabilities, and records of income and expenses. Only those with the login can view the data because it is encrypted, much like the information at a bank. Such as Xero and QuickBooks online.

How is the cloud used in accounting?

Cloud accounting provides 24/7 access to key business numbers from any internet-connected location, eliminating the need to work from a single office-based computer. Users can access accounts via a web browser or the provider’s mobile app.

Understanding Data Security in Cloud Accounting

Cyber-attacks are increasing globally, targeting both large and small organizations. A University of Maryland study found that hacking attacks occur every 39 seconds, with government, tech sector businesses, and retail being the most targeted groups. Small businesses make up 43% of all cyber-security attacks. They are vulnerable due to their inability to afford high-end security, such as servers, fire and flood protection, encryption, and data firewalls. Cloud accountancy is a safer option for most businesses, as the service provider handles cybersecurity. However, data security in cloud accounting must be considered by both companies offering accounting software and business owners using the software to store their accounts.

QuickBooks Online and Data Security

QuickBooks Online is a robust data security system developed by Intuit, which has implemented various measures to protect its users’ data. The servers are housed in a secure facility with video surveillance, a full-time security staff, and alarms to prevent high-tech breaches. Other physical threats include smoke detectors, fire suppression systems, and flood detection systems. A secure power supply with backup generators is also available for power cuts.

Technologically, QuickBooks Online is secured by DigiCert®, the leading SSL Certificate Authority, which encrypts all data using 128-bit Advanced Encryption Standard (AES). This symmetric algorithm uses a 128-bit block key, making it impossible to crack. Despite cutting-edge computing power, it would take billions of years to find the right key, making 128-bit AES the industry standard used by banking and government institutions to protect sensitive data.

Create a culture of data security!

A study by IBM found that 95% of online security breaches are due to human error, with 19 out of every 20 cyberattacks being caused by errors made by employees. To combat this, a culture of data security should be established, emphasizing the responsibility of employees when accessing sensitive data. Additionally, workshops or training events on data security, such as password creation and phishing detection, can be held to educate employees on data protection.


Data security is crucial in cloud accounting, as cybercrime costs are expected to reach $10.5 trillion USD annually by 2025. QuickBooks is working to protect clients’ data through physical protection, 24/7 security guards, and encryption technology. However, vulnerabilities remain at the client level, necessitating up-to-date best practices for online security.

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