Nashville CPA

Client Portal

Serving the Greater Nashville Area

Recovery and Retention: How Small Businesses Can Survive Data Loss

According to the Washington, D.C.-based research firm Clutch, 58 percent of small businesses aren’t prepared for data loss, and 60 percent would be forced to shut down within six months of such a catastrophic event. Those are sobering numbers to be sure, though not completely unexpected given the importance of data to a small businesses in today’s economy. Data loss can occur in any number of ways, from accidental deletion to a severe electrical accident. It falls within an accountant’s purview to help their company be prepared both financially and operationally in the event of such an existential threat.

How Small Businesses Can Survive Data Loss

Do some detective work

The cause of data loss is usually a mystery in the beginning. It’s important to try and find the hole in your security or how your company’s computer security protocol may have contributed to a mistake on the part of someone within your organization. Finding out what happened is important because it will guide your efforts as you make corrections and restore the confidence of clients, investors and employees.

Simple human error means one thing; the infiltration of a virus or malware means something else entirely in terms of countermeasures. In any event, recovering data files will cost your company money and, handled inadequately, it can cost you business once word gets out.

Stay in your ‘lane’

As an officer of the company, it may be your instinct to try and recover missing data based on your knowledge of the company’s systems and safeguards. The danger is that it’s possible the data may still be retrievable, even if damaged, and that by attempting a recovery you could end up doing permanent damage. Avoid the temptation of pressing IT into attempts at recovery – for one thing, you could be overstepping your authority. For another, your IT personnel may lack the specialized knowledge that companies involved in recovering data possess. As an accountant, you are also responsible for maintaining the company’s profitability in times of crisis.

Leaving the data recovery process in the hands of an expert can help keep you online doing business while the problem is being addressed. Until you reach that point, it’s advisable to shut down your computer system until the situation has been assessed and you’ve been advised by your troubleshooters.

Finding a data recovery company

Your ability to recover lost data may depend entirely on whom you engage to do the job. Do as much research as time will allow, given the severity of the situation, and opt for a data recovery company with optimal security and a reputation for quick turnarounds. For example, a company like Secure Data Recovery has plenty of experience helping small businesses recover from such predicaments.

Timely notification

Most states require companies to notify customers if and when their data has been compromised. Compliance is an important part of the accounting department’s oversight function, so make sure that your customers are notified in a timely and comprehensive manner. Try not to think of it as a legal requirement or the only way to avoid legal action.

Instead, treat it as an opportunity to be transparent and strengthen client relationships with full disclosure and all the details you have at your disposal. Above all, be explicit about how you will correct the situation, with advice for what your clients can do to ensure their systems won’t be similarly compromised.

In many ways, your company is only as viable as its data is secure. Being prepared to take resolute and self-assured action is vital because you must be in a position to retain your customers’ confidence. Company growth and profitability depend on it.

Image Courtesy of Pixabay.com.

Leave a Reply

Contact Information

Evan Hutcheson, CPA, LLC
1017 16th Ave S
Nashville, TN 37212
Phone: 615-727-2295
Fax: 615-285-8188
email: [email protected]
Hours: 8 a.m. to 6 p.m. Mon~Fri
URL of Map

Proud Member of:

Tennessee Society of CPAs
Construction Financial Management Association
Thriveal CPA Network

Location

Click to open a larger map