Your key source data can be many things – personal information, payment details, financial transaction documentation, contracts etc….
For the purposes of this blog, I am referring to financial transaction documentation, such as supplier invoices, expense receipts, and wage records, that we save onto our online accounting systems.
The Australian Taxation Office stipulates that we must keep all evidence of sales and purchases, wage and salary records including superannuation contributions for at least five years.
For the past decade or so, Australian organisations have been investigating and moving to “paperless office” environments and saving their key source documents electronically on business computer hard drives. More recently, organisations are investing in moving their “paperless offices” processes onto the internet or in other words, to the “cloud”.
For a fee, generally monthly, we can save all our important documents to the cloud, which are computer hard-drives physically located somewhere in the world, accessed via the internet. Apparently, this is where our documents are safe from getting lost, burnt, stolen, ruined by the sun/heat/exposure, or from local hard-drive crashes and total loss of data.
Sounds great doesn’t it!
Does this mean that moving to a paperless, in the cloud office environment, removes the need to keep and file hard-copy paperwork? Many organisations no longer keep and file hardcopy paperwork, and instead are saving a lot of their important information to the cloud. This poses a few questions:
1. Where exactly is my data saved? Which country? How safe is this?
2. How can I access my important data if I don’t have an internet connection?
3. What happens if my circumstances change and I no longer require or can afford the subscription fee to the provider that is enabling me to save my data to the cloud?
Let’s look at two accounting systems used by small to medium businesses in Australia that allow users to upload key source financial documents to the cloud: MYOB AccountRight Live and Xero Accounting.
MYOB AccountRight LIVE: –
MYOB saves all of an organisation’s online MYOB accounting data and uploaded source documents on computer services located in Australia.
Due to the nature of the MYOB AccountRight family of programs, the system requires the software to be installed on the user’s local computer, and the user can work online in the cloud or off-line on the local computer. By syncing the program locally and onto the cloud, the user can work with minimal effect when there is no internet connection, and the data is located both online and on the local computer.
If the MYOB subscription ceases, or there is no longer access to an organisation’s MYOB online transactional data, data can easily be accessed by opening the data file locally and accessing transactions in a Read-Only state. However, any uploaded source documents will not be accessible as these were saved online and deleted within a short period following the subscription ceasing.
Xero Accounting:-
XERO Accounting online system is used in Australia, New Zealand, UK, and USA. An organisation’s data is held in USA.
There is no access to your accounting data if there is no internet connection.
Xero retains an organisation’s data according to the tax requirements of each Region, even after a user’s subscription has been canceled. Transactional data can be exported prior to ceasing a subscription. However, any uploaded source documents such as supplier bills or expense receipts cannot be exported. The subscriber can restore access to a deleted organisation if needed, by restarting the subscription and accessing previously uploaded documents.
It is apparent then, that organisations that do not want to keep paper records, must save their key source documents on local devices, for example, backup drive, USB – a device that can be accessed in the future, in the following five years – a device that will not be obsolete technologically and that does not require a subscription payment to a third party. We cannot rely on uploading our source documents into our accounting systems as a safe filing system for these documents.
It is always the responsibility of the business owner to retain key source documents and records in an accessible manner.
Need assistance with your MYOB or Xero? Contact Elke at ewick@miebs.com.au or 0410 819 783.
So, how safe are your online Key Source documents?