Guide Small Business

6 Importance of Data Backup In Accounting

Jun 7, 2021 3 min
The Importance of Backup and Restore

6 Importance of Data Backup In Accounting

Reading Time: 3 minutes

There can’t be an overemphasis when it concerns the importance of data backup in your everyday business operations.

Occasionally, the unthinkable happens, with all of your financial data accidentally wiped out. The only real option is to spend hours, days, or weeks trying to input all the information again.

Most times, it just doesn’t turn out great.

Let us look at why you need to back up your accounting data regularly.

6 Importance of Data Backup

  1. Protection against data loss
  2. Legal obligations
  3. Safeguard client and vendor details
  4. Eliminate time wasting
  5. Investors and planning
  6. Peace of mind

Protection against data loss

Other than accidentally wiping your data, other similar disasters could also occur – server crashes, hard drive failures, natural disasters, and even human-made disasters can and do occur.

You should always be ready for such uncertainties.

Legal Obligations

In many countries, you are obliged to keep records for a specified period.

To comply with regulations and ensure you can consistently produce data from a specific period, you should keep backups. 

Auditors are another reason backing up your data is a good idea.

If your business is audited, the ability to access account information quickly and efficiently can save you time and embarrassment. 

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Safeguard client and vendor details

Maintaining complete customer and vendor details on your financial database helps you in several ways.

You can always find their information when you need to contact them. You know where to send invoices, payments, and other documents, showing you are a reliable and efficient business. 

Losing this information could cause many difficulties, so keeping it well backed up will prevent any future headaches.

Eliminate time wasting

If you employ someone to maintain your books, the assumption is that you have already paid them for the hours it takes to input all your financial records. 

If, in an unfortunate situation, the worse occurs, and you need to input all information again, that would cost you twice for the same work.

You waste your bookkeeper’s time as they aren’t dealing with your current finances.

This could cause delays in maintaining daily accounts, invoicing, and paying bills or wages. The knock-on effect may even cause cash flow problems. 

Investors and Planning

To measure how a business is doing, it’s often necessary to look at the financial records for different times in the year or compare them to previous years.

Directors and investors cannot make decisions without access to this information. 

Backing up your data regularly makes it accessible for presentation when required. This has another advantage of making your business appear organized and professional.

Peace of Mind

With cybercrime on the increase and the ever-present potential of system crashes or other disasters, knowing all your necessary financial data is adequately backed up gives you peace of mind.

Backing Up Your Accounting Data

Digital data can be saved as a duplicate to a cloud service. This is preferable to maintain a copy on a separate in-house server, as this could be affected by the same problem as the primary server hosting the original information. 

Restoring Data

Should the worst happen, and you lose your financial data? Having the ability to restore the last backed-up version can save your business not only time but money.

Depending on the size of your company, it could take days or even weeks to rebuild it from scratch.

The assurance of a data backup and the ability to restore it gives a priceless feeling.

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Final thoughts on the importance of data backup

It would be best to create a backup schedule that prevents you from the nightmare of losing all your accounting information.

Akaunting provides a quick way of keeping all your accounts safe and secure with the Backup and Restore app.

It integrates seamlessly with Akaunting, ensuring you’ll never lose your financial information.