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Many companies depend on payment processing companies to manage their online payments. However, completely relying on a third party can lead businesses to underestimate their payment gateway security risks and requirements, opening them up to data breaches and cybercrime. This issue only becomes magnified when companies undergo changes like expanding operations or migrating to a subscription billing model.

A study by PWC, Global Economic Crime and Fraud Survey 2022, found that 52% of companies with global annual revenues exceeding $10 billion experienced fraud in the past 24 months, with 18% losing over $50 million in their most disruptive incident. Among smaller companies earning less than $100 million annually, 38% experienced fraud; of those affected, 22% faced a total impact of over $1 million.

Therefore, online payment security must be a top priority to safeguard your business. Keep reading to discover five payment gateway security features every business needs to process transactions securely.

 

What is a payment gateway?

A payment gateway is an e-commerce merchant service that collects customers’ payment information to authorize a transaction, ensuring that the payment is legitimate. Payment gateways read, encrypt, and transmit data between the merchant’s website, the customer’s financial institution, and the merchant’s financial institution.

Further reading: Online payment gateways bring these 5 benefits 

 

Why is payment gateway security important?

Payment gateway security is vital to guarding your customers’ personal data and protecting your company. Security breaches, fraud, and compliance violations are all costly mistakes that not only sacrifice your hard-earned revenue but jeopardize your brand’s reputation.

Under the European Union General Data Protection Regulation (GDPR), breach or theft of cardholder data can result in penalties of up to €20 million or 4% of annual global turnover, whichever is greater.

Additionally, payment providers can fine companies who breach the Payment Card Industry Data Security Standard (PCI DSS) $5,000–$100,000 per month for non-compliance.

Therefore, as more customers embrace e-commerce for their purchasing needs, companies must be ready to provide a secure shopping experience.

 

Top 5 payment gateway security features

Continuous learning is foundational to creating a culture of data security, so it’s critical that your team remain updated on the latest safety strategies and regularly evaluate whether it’s time for an upgrade. Below you’ll find five payment gateway security features that are necessary in today’s business climate.

 

1. PCI DSS Compliance

Any company that processes credit or debit card purchases must comply with the international rules and regulations stated in the Payment Card Industry Data Security Standard (PCI DSS). The main role of the PCI DSS is to provide businesses with a standardized approach to rigorous, secure transaction processes while retaining a smooth customer experience.

Maintaining PCI compliance is essential to avoiding penalties and improves your reputation with payment brands, builds customer trust, and bolsters your systems to prevent data breaches and credit card fraud. The PCI DSS has 12 key requirements, further broken down into 78 base requirements and 400 test procedures. The 12 key requirements are outlined in the image below:

The 12 key requirements of PCI DSS compliance

Companies must adhere to different compliance levels based on their size. The PCI classifies businesses on a four-level scale by the number of transactions they process per year:

All legitimate processing providers are required to offer PCI-compliant services; however, it’s still worth investigating the PCI DSS as your business will be on the line for any non-compliance. When determining which payment processor to invest in, make sure it can manage credit card processing, transaction history, and credit card data management while complying with the PCI DSS.

 

2. SSL and TLS protocols

Secure Sockets Layer (SSL) and Transport Layer Security (TLS) protocols encrypt the online connection between the browser and the server, creating end-to-end protection for sensitive information. These security measures ensure the secure transmission of customer data collected by a payment gateway.

Here’s an overview of how the encryption process, nicknamed the “TLS/SSL handshake,” works:

If you’ve ever visited a website where the URL begins with HTTPS or has a padlock symbol next to it, then you’ve encountered TLS/SSL encryption. These hallmarks signify that the website is TLS/SSL certified and that your customers can trust your company with their payment information.

TLS SSL Handshake payment gateway security

 

3. 3D Secure

3D Secure (3-domain structure) or payer authentication, is a security feature that addresses issues of fraud in online debit or credit card transactions. Customers are required to complete an extra step of verification with their card issuer at checkout, engaging all three domains of payer authentication:

The most recent iteration, 3D Secure 2, allows for different methods of verification other than a password, including:

4. Tokenization

Tokenization secures customer payment details by replacing sensitive data with a string of randomly generated numbers, referred to as a ‘token.’ The PCI DSS promotes the adoption of payment tokenization with good reason.

Tokens provide one-to-one replacements for primary account numbers kept outside the merchant’s server. The merchant does not need to be responsible for storing sensitive information, protecting the merchant and customer against fraudulent activity.

This extra layer of protection renders confidential information meaningless and useless in a breach. If a hacker were to gain access to the tokens, their efforts would be wasted because they would have no way to decrypt them.

Tokenization

 

5. Address Verification Service

The address verification service (AVS) is another commonly used method to prevent credit card fraud. After a customer enters their billing address, AVS will check if it matches the one on file with the credit card provider. If it’s a match, then the transaction will be approved.

AVS can be an effective protocol for minimizing chargebacks. Verifying details about the cardholder provided during the purchasing process can help flag suspicious transactions and protect the company before fraud occurs.

Further reading: The ultimate checklist for the best recurring billing payment gateways 

MoxiWorks saves 80 days annually

Payment gateways present considerable benefits in a market where many finance teams need help managing exponential growth. Where they were once responsible for monitoring a manageable number of monthly payments, these days, many find themselves swamped with an ever-growing user base and face overwhelming workloads. It can become hard to track (particularly when dealing with varying billing frequencies), process, and promptly follow up on missed payments. Resulting in a perfect storm—causing many customers to jump ship and companies to leak considerable revenue.

As a result, payment gateways have become necessary for recurring revenue. They offer a window through which customers can securely manage their recurring billing and update details. Those investing in modern subscription billing must ensure all the puzzle pieces are in place to reap the benefits of their efforts. Below are five payment gateway benefits that will give your finance team peace of mind.

Let’s look at the 5 core payment gateways benefits

1. Safer, faster, smoother transactions that give customers peace of mind

The most significant advantage of a payment gateway is speedier, safer, and smoother transactions. From a customer experience point of view, this is a must. Nothing sews distrust faster than botched payments or a lack of transparency about where billing details are stored. Rather than subject your customers to the administrative backlog, payment gateways give peace of mind, giving users a straightforward, familiar interface to manage their billing without waiting for customer care or wondering when their payment will be processed.

Traditionally, many customers may have shared their payment details in person, over the phone, or through email. However, the modern customer may be receiving your services from anywhere. Physical proximity is no longer necessary, and with so many companies rolling out virtual services, they will likely be engaging clientele from different regions. Those without gateways risk bottlenecking payment processing and inundating teams with customer complaints as users try to get in touch to change account details, query discrepancies, and confirm receipt of payments.

 

2. Access to advanced tools and security as the payment landscape shifts

One can never overestimate the importance of security tools and fraud detection in today’s payment landscape. With cyber crimes on the rise, it’s critical to protect customers from data breaches. One of the key advantages of payment gateways is that the onus of payment security is on the provider.

They’ve entire teams dedicated to keeping their systems up to date with the most advanced features and security compliance. The best gateways are equipped with the most up-to-date security features, such as fraud detection tools, PCI-DSS compliance, and advanced data encryption.

 

3. Improves user experience, saves time, and empowers your customers

The simplification of every stage of the payment process means that both the customer and your finance team save a considerable amount of time. With phone lines no longer clogged, teams can focus on strategic planning and investigating discrepancies. By automating the process, you can meet customers’ expectations with ease. And with a portal through which they can easily access and update information, customers feel more in control and no longer must make time to resolve simple issues.

It’s no surprise that a frustrating billing process can lead recurring customers to leave, as it’s simply not worth the ongoing hassle. Gateways can reduce customer churn, as those who regularly interact with your payments department no longer face the usual frustrations. Instead, by giving them the tools they need to manage payments with just a few clicks, you will improve their experience, and they will be more likely to base their loyalty on the quality of your products and services.

The complete guide to subscription management
4. Reduces declined payments with real time transactions

Declined transactions and missed payments are a considerable strain on resources. If you add up the hours spent chasing down card details and trying to implement effective dunning processes, you might be surprised at how much energy your team could spend elsewhere. Payment gateways automate this process, checking the availability of funds in real time and reducing the likelihood of a build-up of failed payments that your team needs to follow up on.

It is also possible to automate notifications for missed or declined payments if the gateway integrates with your recurring billing system, so that customers can log on to the gateway and quickly update their information.

5. Enables you to accept multiple payment types and cards securely

Customers are no longer confined to purchasing products and services within their market, and it’s common for users to shop online until they find the best possible deal. This means you may have users who use different payment methods than the most common ones available in your region. Payment gateways enable you to accept a much more comprehensive array of payment types and cards. They also allow your customers to pay in the currency of their preference. As a result, you can quickly grow your market share in international markets.

MoxiWorks saves 80 days annually

 

When managing complex recurring billing payments, many focus on the nuts and bolts of invoicing and give little thought to the importance of payment gateways or portals. Companies need to streamline the billing process from head to toe, including payments. Giving your clients secure access to their payment information is essential to a successful strategy.

Ignoring the importance of payment gateways may not impact teams immediately, but most will eventually feel the pressure. As the number of users grows, finance teams need to manage more than a handful of clients, a previously serviceable customer base can quickly become unmanageable. Standards start to slip. Human errors creep in, dunning rises, and coordinating billing becomes increasingly tricky.

It’s not uncommon for overwhelmed teams to send out late or incorrect invoices and fail to update billing information. But how can a payment gateway change that? The answer is simple: by giving clients access to a secure, trusted platform where they can update their payment information, you encourage them to take ownership of the payment process.

There will always be exceptions, but gateways and portals, significantly reduce the time teams need to spend chasing down monthly payments, freeing up your team to focus on more strategic initiatives or to assist customers who might need assistance. If you’re serious about implementing modern pricing models, then payment gateways are critical to your go-to-market strategy.

 

Why do I need a payment gateway for recurring billing?

In a world where customers are used to logging their details in various portals and automating payments, companies that do not offer an adequate gateway or portal may seem obsolete, low-tech, or old-fashioned. It can lead to customer frustration as they need to call or email you directly to update information, and it can increase the stress for a finance team that is ill-equipped to deal with calls and emails from a growing user base. Most customers are also inclined to feel more secure sharing payment details in a trusted portal than over email or phone.

The pushback we often hear about implementing payment gateways is that it’s a lot of bother when teams can call up or email customers directly about billing. This attitude fails to account for the pressures of scaling operations and the preferences of many users. In essence, it’s an attitude that dismisses the importance of serving the customer first.

 

A checklist for choosing your payment gateway

1. Integrates with comprehensive recurring billing capabilities

Your payment gateway must offer you and your users the ability to manage recurring billing in all its complexity. The software used to manage billing processes needs to link directly to the payment gateway to avoid bottlenecks; this is called an integrated payment gateway. It’s better to avoid hosted payment gateways where finance teams must transfer data between multiple systems as they’re separate. As you can imagine, this quickly leads to problems and errors over time.

Users may only see the gateway, but the background engines must be in tune to ensure that billing is accurate across all systems. That way, payments can be safely automated once the invoice is sent out (weekly, monthly or annually, depending on the billing frequency) without having to double- and triple-check details between systems.

5 most common billing frequencies

2. Accounts for a variety of payment cards and methods

Companies must consider the kinds of cards a payment gateway supports, particularly for cross-border customers. Supporting Amex, Visa, and Mastercard transactions is the bare minimum, and it’s worth investigating what payment types are most common where you do business.

It’s essential that recurring billing is as convenient as possible for your users. For instance, do customers in a territory frequently use a debit or prepaid card? What other kinds of payments are common? Though it might only be possible to service some payment methods or cards, companies should seek to strike a balance by at least covering the more popular options in a region.

3. Merchant account where payments are stored for approval

A merchant account is a temporary retailer account where payments are stored pending approval. Most payment gateways will use this security measure before transferring the payment to the final bank account. This gives the customer’s bank time to run any checks for unusual payments and helps banks cancel out errors like accidental double payments. It’s a payment portal feature that provides an extra level of security. Some gateways process payments immediately, and this can lead to a higher processing fee.

The complete guide to subscription management

4. Supports multiple currencies

Even if you do not do business internationally, you need to know who your customers might be. Many companies may receive cross-border payments even if they do not necessarily sell into other markets. We live in a world where many people live and work away from their home countries; many of these people end up paying for services and products in their home countries—whether that’s trying to cover medical bills for a loved one or sending a birthday gift.

Your payment gateway or portal should support various currencies so that users can understand their bills quickly and without any hidden surprises. It could be shocking for users in other countries to see the final payment if they thought the currency was their own. This is particularly true for Canadians shopping on US sites that appear to be in dollars. They may assume that these are Canadian dollars if they don’t check. They might leave the payment gateway once they realize the actual cost or cancel the subscription. This is partly because of anchoring or referencing, a concept in pricing psychology, which means that the perceived value of your product has been assigned to the initial assumed cost, and they’re no longer willing to pay more. It’s easy to avoid this by simply displaying the correct currency throughout the payment process.

The anchoring effect greatly influences buyers’ reference prices

5. Offers comprehensive 24/7 customer support

Some payment gateways offer little customer support, which means your users don’t get the customer care they need when they most need it. Users are often anxious when trying to sort payment errors, so you need to make sure there’s a team on hand that will be ready to help when issues arise. Sending emails or submitting support tickets can add a layer of frustration when customers are already stressed. Look for gateways that offer meaningful technical support, such as 24/7 chat or a helpline, so your users can resolve any issues that might arise.

6. Clean UX is critical as recurring payments mean recurring usage

If you plan to invest in a recurring billing payment gateway, you must consider each option’s usability. The more frequently a customer needs to access your payment gateway, the more likely it is that any failures in UX will become an ongoing frustration. We all know the pain of trying to make payments on systems that are not up to industry standards, and if we had to do so frequently, we might likely abandon ship and find a new service provider. Retaining happy subscribers means you need to pay more for better functionality. For instance, double check it’s easy to download invoices or change billing information.

7. Clear and transparent communication around vendor fees

Providing a payment gateway for your customers will cost, but there should be no hidden fees or charges. Any vendor you partner with should be open and transparent about all expenses that might arise, and you should receive a clear overview of the costs you will incur by investing.

The standard fees you should expect are interchange fees and transaction fees. Other expected costs may include everything from flat fees to chargebacks and IRS reports fees to non-sufficient funds (NFS). If you’re unfamiliar with payment processing charges, this could become an overwhelming list, so it’s essential to communicate directly with your vendor and get clear answers about costs and fees.

 

MoxiWorks saves 80 days annually

Deferred revenue is an essential accounting practice for any scenario where a customer prepays for goods or services. Any team operating a subscription-based business needs to understand its nuances.  Whether you’re an established SaaS enterprise or migrating your business to a subscription-billing model, you must understand how to navigate complex revenue recognition while maintaining compliance with accounting standards. Deferred revenue is a critical piece of that puzzle, and this blog clarifies what it is and why it’s reported as a liability.

What is deferred revenue?

Deferred revenue refers to advance payments made by a customer for goods and services the company will provide in the future. It’s also known as unearned revenue; since the obligation has yet to be delivered, the payment hasn’t been ‘earned. Deferring revenue appropriately is a key component of revenue recognition for subscription billing.

When do you need to defer revenue?

Following US GAAP guidelines for accounting conservatism, companies must defer revenue anytime there is a delay between when the customer pays and when the obligation is fulfilled. If the good or service is then undelivered or cancelled, the company may owe the money back to the customer.

It’s best practice to recognize revenue as it’s earned and track customer behaviour with a customer aging report. When customers pay in advance, it’s particularly important to keep accurate reports of unearned revenue, so that your company does not invest or use more of its resources than are strictly available.

What is the difference between deferred revenue and accrued expenses?

Deferred revenue and accrued expenses both appear under liabilities on a company’s balance sheet. While deferred revenue refers to money that the business has received in advance of providing goods and services, accrued expenses are money the business owes for goods and services it has already received. One way to think of it is that the two are inverses of each other.

What types of businesses record deferred revenue?

Deferred revenue is commonly held by any business where customers pay in advance for goods and services. Popular examples of businesses with deferred revenue include:

Further reading: The complete guide to 8 SaaS pricing models to grow subscriptions 

Common sources of deferred revenue

Why is deferred revenue reported as a liability?

According to the US GAAP standards regarding revenue recognition, when customers pay for products or services in advance, companies must record the income as a liability on their balance sheet rather than revenue on their income statement. This accounting treatment demonstrates that the company still owes the customer and protects the company from overstating its value.

In the event that the order is cancelled or cannot be delivered according to the original plan (ex. natural disaster, supply chain shortages, bankruptcy), the company must repay the customer their prepayment. Revenue is also taxed in the same period that it’s recognized, so if there’s even a slight chance you’ll have to repay the customer, it’s best to defer the revenue until the goods/services are delivered.

Is deferred revenue recorded as a debit or credit on the balance sheet?

Deferred revenue is a liability until the products or services are delivered, so you will make an initial credit entry under current or long-term liability, depending on whether the sale is under twelve months. You will debit the sales account and credit the deferred revenue account as you earn the revenue.

This process may seem simple, but it can become complex when applied to recurring revenue. If you’re looking for more information, our blog also covers best practices for recognizing revenue under ASC 606 and IFRS 15 and has a special primer for SaaS companies on ASC 606.

Example | How to account for deferred revenue from an annual subscription

Assigning a specific adjustment account to track deferred revenue enables you to record unearned income as a liability and accurately recognize revenue as you fulfil the performance obligation(s) in your contract.

For this example, let’s assume that you’ve secured an annual subscription with a client at a flat rate of $18000. The client pays the full amount upfront; however, you cannot recognize the full $18000 until the service has been provided. You must evenly divide the total across one year, which is the duration of the contract, and recognize the revenue in increments.

For the first month, you recognize $1500 and defer the remaining $16500 to an adjustment account. For each month after that, you’ll credit the deferred revenue account and debit the sales account $1500.

Using an adjustment account for flat-rate annual subscription

Introducing Subscription Billing Suite

Complex revenue recognition is unavoidable in any business model that employs subscription billing, but it doesn’t have to be complicated. A robust subscription management solution like Subscription Billing Suite can simplify the process by automating deferred revenue and enabling you to remain compliant with accounting guidelines such as ASC 606 and IFRS 15. Your accounting team can focus less on repetitive, mundane tasks and redirect their attention to what matters.

 

Premium pricing strategies pair well with many of the common subscription billing models and are most often used to establish a perception of higher quality in the marketplace. Traditionally, luxury brands tend to opt for this pricing strategy; however, these days, it’s used in every industry to denote better quality services and products. SaaS companies that have built a solid brand reputation often use this pricing approach in the advanced tiers that offer access to the most features.

Those hoping to implement premium pricing will want to evaluate their market position and make an informed decision by weighing the pros and cons. This blog breaks down the advantages and disadvantages, offering examples of the strategy in action, so you can make an informed decision about whether it will work for you.

 

The advantages and disadvantages of premium pricing strategies

The pros

The cons

 

Check out our complete guide to subscription management

 

When should a brand consider premium pricing?

Premium pricing is best used where there is brand recognition, and a company has garnered a reputation for high quality in a specific market. Newer brands might start with lower pricing, implementing higher price points as reputation grows, and there’s a strong foundation of social clout, reviews, recommendations, and recognition. It may be premature to implement higher price points without first developing a demand for your products and services.

Premium pricing strategies can also be used effectively in tiered offerings to help increase the perceived value of more affordable tiers. It’s well-known in pricing psychology that many customers will gravitate towards mid-tiers, and higher price points on the final tier can make mid-level options more attractive. At the end of the day, choosing whether premium pricing is the way to go will require comprehensive market research, a close analysis of subscriber churn metrics, and a solid understanding of your costs. You can learn more about choosing the right strategy for your company here.

Before you implement premium pricing

 

Examples of successful premium pricing strategies by industry

Microsoft sets itself apart in the SaaS industry with Xbox Series X

The SaaS industry is a notoriously competitive market, but one in which Microsoft has built an incredible reputation. There’s no question that most of us can quickly recognize the brand. They offer numerous affordable options, and the level of service and quality associated with Microsoft means they can implement premium pricing on select services and products. For instance, Xbox Series X builds on Microsoft’s reputation, giving gamers access to the console they know and the games they’ve come to love at a premium monthly rate. Alternatively, users can buy the console outright, but they will not have access to the Xbox Game Pass.

Canada Goose synonymous with quality in the retail industry with premium pricing

The retail industry is a place where premium pricing is associated with high-quality brands. Canada Goose prices its coats above the average cost, confident in the reputation and recognition it’s built over the years. It’s an interesting example as many of the premium-priced retail brands are designer options, but the pricing here is based on the known warmth and durability of the products. These coats are everywhere in colder North American cities, with consumers happy to pay more for the perceived value.

Fairmont Hotels and Resorts use premium pricing to signal luxury in the hospitality industry

Nowhere does premium pricing come with higher expectations than in the hospitality industry. Brands like Fairmont invest in exceeding standards at every level of their offering. The entire experience caters to premium tastes, from luxury suites to fine dining. Customers expect to be whisked away from the real world into the lap of luxury.

 

Bolster your premium pricing strategy with a subscription billing solution

Successfully implementing premium pricing strategies will require flexibility in your accounting department. Teams may need to run multiple pricing experiments and require a subscription billing solution that can effectively handle the complexity of pricing models, billing frequencies, and deferral schedules. Get the basics right by investing in a solution that automates even the most complex billing schedules and empowers you to conduct as many pricing experiments as you like without causing unnecessary work for the accounting team.

MoxiWorks saves 80 days annually

Poor data management leads to messy, error-prone data and unreliable insights. Finance teams struggling with these issues wind up left in the dark, and businesses lose their advantage over competitors and are more likely to take actions that will hurt the bottom line.

Companies must maintain a high data management standard to ensure that leadership can adequately guide the company in making sound financial decisions and remain compliant with accounting and data protection regulations.

This blog will introduce you to ten best practices in data management for finance teams so that you can harness the power of data analytics.

Interested in a specific aspect of data management? Click on the best practice below to skip ahead. 

  1. Define your data management strategy and protocols
  2. Use data to build behavioural models and forecast outcomes
  3. Be selective in what you’re measuring
  4. Remember to account for data biases
  5. Establish access levels based on projects, job roles, and functions
  6. Back up your data and have a disaster recovery plan
  7. Prioritize data security
  8. Create a culture of compliance
  9. Curate an in-house team of data analysts
  10. Don’t keep your data in silos

1.) Define your data management strategy and protocols

It’s much easier to spot and correct problems early on with a well-structured framework for data management and analysis. To garner better insights, your organization must have clear workflows detailing how to handle data for each of the five steps of data analysis; data definition, collection, cleaning, analysis, and application.

The five-step process of data analysis

Below are some sample data management workflows covering the five steps of data analysis:

 

2.) Use data to build behavioural models and forecast outcomes

One of the most valuable applications of data is predictive analytics. This information is vital to creating an action plan for proactively responding to threats and opportunities. Companies can build customer behavioural models with today’s technologies and reliably predict future outcomes.

For example, say you want a good idea of when a customer will pay their due invoice. A robust data management system will enable your team to analyze past payment trends, compare them with other customers, and build a forecast model to determine when that customer will most likely pay their balance. By harnessing these insights, you can build reliable customer aging reports and inform dunning policies to maintain positive customer relationships and reduce involuntary churn.

3.) Be selective in what you’re measuring

You’ll gain reliable insights from nothing if you try to track everything. While it’s very tempting to maximize your usage of every available feature and collect every fragment of data, you’ll only burn through your resources and become too distracted to find information to answer your initial query.

After all, good data management is about enforcing the seven standards of reliable data:

 

This best practice is similar to the first step of data analysis, but you apply it to your entire data storage system. First, understand which metrics you want to track. Then, identify your search parameters and the variables that impact those metrics. After completing these steps, you can collect the necessary data to build your model.

4.) Remember to account for data biases

Beware of data biases! Bias is introduced to data when an error causes certain dataset elements to be over-weighted or overrepresented. Common examples of data biases include:

 

If leadership transitions from intuition-based to data-driven decision-making, they need clean data, or they could make a bad decision that harms the bottom line. Data analysts must note the different biases at each data management and analysis stage. Finance teams can even use AI and machine learning to help check data sets and flag potentially biased data to help raise awareness to leadership.

Common sources of bias in data analysis

5.) Establish access levels based on projects, job roles, and functions

A common problem with poor data management is that team members lack access to necessary data. Leadership may be unaware that certain information already exists because the data is hiding on their servers and make unwise decisions that could have easily been aided by data analytics.

Of course, that doesn’t mean that everyone at the company should always have access to your company’s financial information. The best course of action is to set up data classification protocols that restrict and grant data access based on projects, job roles, and functions. Another strategy is to implement dashboards that track custom company performance metrics and share them at company-wide meetings.

6.) Back up your data and have a disaster recovery plan

According to Veeam’s 2022 Data Protection Report, the average cost of downtime is $88,000 per hour. While it’s true that number is skewed by larger organizations, that doesn’t mean that it’s cheap inconvenience for small and medium businesses.

Data loss is a distressing, costly event with a plethora of ramifications. Human error, unexpected updates, damage to physical devices like servers, and cybersecurity attacks are all common causes of data breaches and data loss.

The best ways to prevent the more serious impacts of these events are frequently backing up data and having a disaster recovery plan (DRP). A DRP will help to keep business continuity while IT quickly recovers operations, mitigating disruption of product and service delivery.

Essentials of an IT disaster recovery plan

7.) Prioritize data security

Protecting your company’s data must be a top priority for all teams. Financial information is confidential, and a breach could result in reputational damage, lost opportunities, and regulatory fines. Strict security protocols are not optional, and any vendors or partners must adhere to the highest data protection standards.

Investing in scalable security tools that support secure sharing and encrypting data flow is essential. Look for SSL encryption, two-factor authentication, advanced firewalls, and automated notifications for new logins. Hosting security awareness training sessions at least once every six months will help your team stay vigilant.

8.) Create a culture of compliance

Another great way to protect your data is to build a culture of compliance within your company so finance is always audit-ready. Depending on your industry, you’ll also have to adhere to specific data protection regulations. For example, healthcare organizations must have strong security measures to protect personal information and remain HIPAA compliant.

Check in with your risk and security officers about new technology with autonomous data capabilities that can support compliance. An invaluable data management tool is data discovery, a feature that reviews, identifies, and tracks data chains necessary for multijurisdictional compliance.

However you decide to tackle this issue, no software alone can completely guarantee compliance. Your policies must supplement your technologies to ensure that your team and tools are sustainable and keep pace with rapidly evolving accounting standards.

9.) Curate an in-house team of data analysts

Spreadsheets quickly lose their appropriateness as the volume and variability of data increase. Real-time reporting and data mining can only truly be achieved with sophisticated business analytics tools and features with AI capabilities.

More importantly, you’ll need a dedicated team of data analysts trained on these latest technologies to enable prompt and accurate insights. Upskilling your existing talent on the finance team will help them become better data managers and result in better forecasting for cash flows, tax liabilities, and revenue growth.

10.) Above all, don’t keep your data in silos

A data silo is an archive controlled by a single entity or is otherwise isolated from the rest of the organization. These repositories crop up in many ways, from files to emails to entire servers, but all share the same trait of hiding potentially vital information.

To gain a full view of your business metrics and understand your financial health at a deep level, your data must be accessible, and your models must include data from different sources. Unstructured, decentralized, and unshared data often cause problems and undermine the rest of the best practices written about in this blog.

Problems caused by data silos

If you can only implement one change to your existing data management—abolish the data silos. Whether you need to integrate a legacy system or clean excess raw data, obtaining an accessible and unified data set is worth it.

Further resources for improved data management

If you’re looking for more information about data management or have a specific question in mind, feel free to browse the resources listed below or contact our team. We’d love to hear from you.

Automate transactions | financial consolidation guide

To succeed in the hospitality industry, companies must continue to exceed customer expectations while simultaneously executing plans for rigorous expansion. However, this is only made more difficult by the host of modern challenges businesses must face. From stressed-out and understaffed teams to budget constraints and poor data management, finance departments are being pushed to the limit where even high performers are struggling to keep up.

That is why many companies are in the process of undergoing a financial transformation. Implementing technology to automate and streamline operations is vital to supporting staff members in delivering quality customer service.

Modern challenges hospitality faces

Within the hospitality industry, financial transformation consists of adopting an agile mindset and upgrading to a cloud-based financial management system to streamline workflows, enhance productivity, and impact the bottom line. Often companies will implement a comprehensive enterprise resource planning system (ERP) to optimize operations and centralize crucial information.

By transforming financial management processes companywide, leadership can access strategic forecasting and achieve even the most ambitious expansion plans. Download our whitepaper for an in-depth exploration into how financial transformation can enable long-term, sustainable growth within the hospitality industry, complete with a modern-day case study, checklists, and statistics.

The CFO’s playbook for hospitality transformation