Backing up accounting and practice management software

Why this data deserves special attention

Accounting, payroll and practice management systems hold some of the most valuable and sensitive information a small business has: client records, invoices, bank details, staff pay and tax history. They also change constantly. Losing a day of a general file share is annoying; losing a day of invoices, receipts and appointment notes can mean errors in tax returns, missed payments and awkward conversations with clients.

These systems also tend to have the most complicated storage. Data may sit in a database engine rather than ordinary files, spread across several folders, or split between a local server and a cloud service. A backup that simply copies the shared drive may miss it entirely. That is one of the most common findings when someone checks a small office's backups for the first time: the documents are protected but the database that runs the business is not.

Locally installed software

Older or specialist packages often run on an office server or a single PC with a database underneath. A plain file copy of a database that is in use can produce a backup that will not open. Use backup software that is application-aware, which pauses the database briefly to capture a consistent snapshot, or use the application's own scheduled backup feature to write a clean file that your main backup then collects.

Find out exactly where the data lives. Vendors usually document it, and it is often not where staff assume. Then confirm the backup includes that location, the application's configuration, and any attachments or scanned documents stored separately from the main database. Many packages keep document attachments in a separate folder that is easily missed.

Cloud accounting and practice platforms

Cloud platforms such as Xero, MYOB's online products and many practice management systems look after their own infrastructure and keep your data resilient against hardware failure. That does not mean you are fully protected. If someone with access deletes records, a user account is compromised, or a subscription lapses, the vendor's backups exist to restore their service, not usually to roll back your individual mistakes on request.

Read the vendor's terms on data retention and what happens if you cancel. Many platforms limit how long you can access data after closing an account. Some third-party services can back up cloud accounting data on a schedule, and most platforms let you export reports, ledgers and contact lists. Exporting key reports at the end of each month or financial year gives you an independent record.

Protecting the logins

For cloud software, the account login is the front door to everything. Turn on multi-factor authentication for every user, especially anyone with adviser or administrator rights. Remove access promptly when staff or contractors leave. Review who has access each quarter; it is common to find a former bookkeeper or an old accountant's login still active years later.

Fraudsters increasingly target accounting logins to change supplier bank details or redirect payments. Good backups help you recover data, but preventing someone getting in protects both the data and your bank balance. Ask your bank and software provider which alerts are available for changes to payee details or new users, and switch them on.

Questions to ask your software vendor

Ask how they recommend backing up their product, whether they support application-aware backup for local installs, how often their own backups run, how long they keep them, and whether they will restore your data to an earlier point if you ask. Ask too about export formats, because standard formats such as CSV or PDF are easier to use if you ever change software.

Write the answers down along with your support contact details and account numbers. In an emergency you will want to reach the right person without searching through old emails. Keep the record with your disaster recovery plan, and update it whenever the vendor changes its support process or you change your subscription.

Test with the people who use it

Restore a copy of the data to a test environment and ask someone from your accounts or practice team to check it. They can tell quickly whether the restored copy shows the right balances, recent invoices and attachments. An IT person may see that the database opens without knowing that last week's entries are missing.

Do this after any major software upgrade, because upgrades sometimes change where or how data is stored. Your accountant may also have views on what records should be kept and for how long, so include them in the conversation about retention. Year-end is a natural point to do both: take an export, run a test restore and confirm with your accountant that the records you need are being kept.