In addition to external threats, such as hacking, viruses, and malware, there are many other potential threats to your company data. The topics below discuss a few additional areas of concern for safeguarding your data.
The importance of proper data backups cannot be over emphasized. There is a long list of things that can happen to your server, including data corruption, hard disk crash, fire, tornado, vandalism, and theft. Backups should be made daily of all data and be taken, as well as kept, off-site until the next day’s backups replace them. You should use a minimum of two complete sets of backups in rotation; however, more are strongly recommended. Further, it is important to “test” your backups regularly to make sure they are working correctly. To test the backups, perform a test restore of an important portion of your backup to a different directory location or computer. This should not affect your day-to-day operation, but will let you verify the data can be restored properly when needed. Don’t wait until a recovery need to find out you don’t have good backups.
Today there are many forms of backups to choose from. You may backup to thumb drives, tape, CD-Rs, DVDs, to the “Cloud”, or removable USB hard drives. Personally, I recommend portable USB hard drives for their durability, reliability, and ease of transport. Cloud backups, while they seem easy and attractive, should only be used as a second, redundant backup.
I would like to share an experience from a private, multi-million dollar company. For the purpose of this story, I will refer to the company and employees by fictitious names. The company, Acme, had a fairly small office. Jane did the billing and scheduling, while Mary did most of the bookkeeping, including A/R, occasional billings, payables, deposits, collections, etc. Mary had been there for years and knew the business and her duties inside out. She was a valuable and trusted employee, always on time with her daily duties at the company. Mary was dependable, and rarely took a day off. Acme used a packaged software specific to their business. The records were monitored by a CPA and “audited” on an annual basis for tax preparation purposes.
It finally happened that Mary was sick for several days and could not do her work, so her boss and others tried to fill in and keep things going. They discovered, much by accident through this process, that Mary had been skimming checks from the company deposits for quite some time. She knew exactly how to do it and cover it up. She would routinely take some of the checks and deposit them into a non-company account she had set up with a similar name to Acme. Anyone that has accidentally deposited a check for another company sent to you in error knows that banks don’t pay much attention to what checks are getting deposited where. Since Mary opened the mail, prepared the deposits, took them to the bank, handled the posting, write-offs, and collections, she had all of the tools necessary to cover this up, without suspicion. The investigation revealed that over the course of a few years, she had managed to divert more than $250,000 into her own account.
Employee trust is important, but must be exercised with diligence. The best prevention is to ensure you have proper controls in place and proper separation of office duties. The mail should be opened and deposits always should be processed and totaled by a person other than the one responsible for applying payments and doing the actual bank deposits. The totals for both those processes should go to a supervisor for cross-checking.
It is important that your accounting software maintain proper accounting practices and have a good audit trail. Your accounting data should contain a forensic trail of every transaction entered into your system and in particular, every correction, change, or deletion to those transactions. Some of the non-construction specific, off the shelf “starter accounting” software packages that many smaller companies use fall short in this crucial area. If someone can delete or change an invoice or other posted transaction without a trace, that is a big problem.
Reliance on extensive spreadsheet tracking and reporting is another potential warning sign. There are way too many factors going into maintaining critical business data in spreadsheets. One entry transposition, type over, bad formula, errant paste, etc., and the data is unreliable. The preparer can pretty much have the spreadsheet report reflect anything they want. Using this type of data for decision making is a bad practice.
JOBPOWER Software is a construction industry specific accounting, job costing, payroll, and document management package that includes the functions, tracking, and reporting that a construction business specifically needs. JOBPOWER eliminates the heavy reliance on spreadsheets required by those companies that use an off the shelf, generic accounting package.
JOBPOWER incorporates many safety features. It maintains a full audit trail, including every transaction. Each correction, delete, or change is an additional transaction with offsetting entries, and its own journal entry number. JOBPOWER also has a tamper proof database; if someone were to try and change data with an editor or something external to the software, an integrity check would promptly catch it and lock the system until resolved.
The backups produced with JOBPOWER are encrypted to prevent tampering or snooping. JOBPOWER operates on standard accounting principles, with journal entries tracked for each transaction. General ledger “T” account level detail is continually balanced against transaction level data to constantly maintain balance.
Your company data is one of your most important assets. Protect it, back it up, and review it regularly to ensure your company has continued success. Review your office procedures and implement separation of duties and controls where appropriate. If your company has a heavy reliance on spreadsheets, it may be a sign that you have outgrown your software. ■
About The Author  Rick DeLand is vice president of Applied Computer Systems, Inc., developer of JOBPOWER Software. JOBPOWER was developed specifically to meet the accounting and job cost needs of contractors and has thousands of users across the United States. Located in Knoxville, Tennessee, JOBPOWER has been helping contractors for 30 years. For more information, call 800.776.6556, or visit

Modern Contractor Solutions, October 2014
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