September 26, 2017

Computer data – how safe is yours?

Do you back up your accounts data onto the same machine you run your accounts software on – even if we are only talking about Excel?

I recently had a call from a client asking them to send me the backup of the data they had sent me for their accounts as their computer had died and I had the only recent backup. Thankfully their systems are good, with this one exception, so they have been able to get up and running quickly.

What would you do?

What would you do?

Another client has sent me their books but had a fire during the year, which included the computer so half the information is in paper format only. It may take a bit longer than usual to prepare their accounts. At least the paper survived to allow me to create the missing bits.

I am not perfect. All the business machines we use on a regular basis are backed each night at 1:30am however, we realised last month that my PAs machine, which lives in its bag when not in use, was missing out. She now has an external disk so she can preserve her work that it not being done directly to the cloud. I also treated it to an external fan so it does not cook in this hot weather.

If you have ever had computer failure, you will understand how long it can take to get up and running. Its not just a case of restoring your computer data. The important thing to remember from an HMRC viewpoint is that you have to keep your records for 6 years plus current so if you change accounts systems over that time you might want to cut a CD/DVD of the data before moving on so that, should the need arise, it could be accessed with help if needed.

If you back up onto a memory stick, make sure it is not only one. One of my clients has a different colour one for each day of the week. Nice touch and certainly avoids confusion. The big question is how much data do you need? I know my backups take about an hour and a half to cloud each night but that includes emails, word documents, photos, spreadsheets as well as mine, and my clients, accounts data. Have a think on what you would struggle to recreate and make sure you don’t wish you had got round to it before.

Your Books Under the Microscope

Last week saw a letter from HMRC asking for all the information that had gone in to the accounts for the tax return to 5th April 2012. I wrote and asked what format, as the letter said they had technical people that could help with computer system.

I had a pleasant phone call from HMRC to say could we print everything out and bundle it up for him. I explained the invoices were Word documents filed per month, the payments were in a spreadsheet per month so would he like a CD with the information. No, we needed to print out each sheet and send everything in a single package. Everything includes my year end adjustments for own use and disallowed items, bank statements for the period as well as the signed accounts.

I have spoken with the client and I think they are going off to Tesco to get some more reams of paper. We have agreed to meet up in a fortnight to make sure we have everything required and box it all up. HMRC have given us a month to get all the information to them and the member of staff at HMRC admitted he was in no rush to receive it as he had a plenty there already. I didn’t ask what the turnaround time would be!

How well would your records stand up to such scrutiny? When the accountant returns your books and says you need to hold onto them for current year plus six, do you know exactly where you have stored them? I have previously had a client who’s garage was flooded some years ago so he binned the soggy papers. He ended up with a large tax bill as he couldn’t produce proof of some payments. Do make sure your storage facility is waterproof and mouse free.

It is possible to get insurance against such investigations. This will cover the extra time your accountant has to spend in talking to/writing to HMRC. It does not cover lost papers or invented figures so make sure you can justify your payments out and be able to demonstrate the completeness of your sales.

It is not just HMRC who may want these figures, I had to produce 3 years sales invoices to an insurance company to justify my claim for loss of earnings against the other party after a road accident some years ago.

Need guidence on your record and data keeping ? Contact me for more information.