Sensitive data like client financial records, personal details, and confidential business information is a prime target for cyber threats. Protecting this data isn’t just a matter of best practice, it’s an essential responsibility. Using software that is SOC 2 certified ensures that firms are taking every precaution to safeguard this information.
Did you know that the cost of a data breach for a top 500 accounting firm can exceed $4.8 million? Far too many firms unknowingly expose themselves to significant risks by partnering with technology providers that lack SOC 2 compliance. Cyber-attacks have become a significant threat to CPA firms, with even small firms falling victim to breaches that can devastate their operations.
What is SOC 2 compliance?
SOC 2 is a certification standard that ensures service providers have robust systems to manage and protect client data. For accounting firms, SOC 2 compliance guarantees:
- Client data is protected from unauthorized access or leaks.
- Systems are to prioritize privacy and safeguard sensitive information.
- Vendors follow security standards recognized across the industry.
Without SOC 2 certification, technology vendors are not held to the same security protocols, leaving your firm and client data vulnerable.
The risks of partnering with non-SOC 2 compliant vendors
A single mistake—just one unsecured vendor—can cost your firm an average of $4.8 million in damages from a third-party data breach. For accounting firms handling sensitive client information, the financial fallout includes:
- Regulatory fines for inadequate data protection
- Legal fees associated with client lawsuits
- Remediation costs for rebuilding compromised systems
A breach doesn’t just hit your bottom line—it threatens client trust, exposes sensitive data, and invites regulatory scrutiny. Protecting your firm and your clients starts with taking strong, proactive measures to secure your technology.
Increased exposure to data breaches
Non-SOC 2 compliant vendors lack the rigorous controls required to protect sensitive information. For firms managing critical client data, even one breach could have catastrophic consequences.
💡Did you know?
or extortion involved in more than 40% of these cases since 2018.
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Loss of client trust
Clients entrust accounting firms with their most sensitive information. A breach not only erodes that trust but can also lead to lost business and damage to your reputation. In a profession where reputation fuels referrals, the damage from lost credibility can be beyond repair.
Regulatory challenges
Many accounting firms must comply with strict data security regulations. Partnering with non-compliant vendors, or experiencing a breach, can expose your firm to audits, fines, stricter compliance rules, and lasting harm to your reputation.
Why SOC 2 matters for accounting technology
Working with SOC 2 compliant solutions ensures that your vendors prioritize data security. For firms using technology for invoicing, payments, and collections, SOC 2 compliance means:
- Secure invoicing: Automated systems that safeguard billing data from unauthorized access
- Protected payment processing: ACH and credit card payments are encrypted and handled securely
- Confidence in automation: Recurring payments and reminders operate under strict security protocols
When evaluating technology providers, always ask the following questions:
- Are you SOC 2 certified?
- What measures do you take to secure client data?
- How often do you audit your systems for vulnerabilities?
When evaluating technology providers, choosing one with SOC 2 compliance is critical for your firm’s reputation and financial stability, giving you confidence in a solution built to meet the highest standards.
Don’t leave your firm exposed—see how SOC 2 can secure your future. Schedule a free 30 minute consultation.
