Why Emailed Documents Are a Bigger Security Risk Than the Cloud

Practice Management Security for tax professionals

Now that tax season is near, you’re probably preparing to sift through papers and receipts from your clients. While many people use mail to deliver documents, some tax professionals are turning to email and cloud systems for managing documents. Although email is an easy way to relay information, it can also be one of the riskiest. Below is a brief overview of the risks associated with email and cloud technologies so that you’re informed this tax season.

Risks of Using Free Email 

One of the biggest reasons you don’t want to use email to send tax documents is because the documents aren’t encrypted when they are sent, unless you are using an encrypted email service. This means that when the files are traveling from computer to computer, they can be read by anyone who encounters the files. Aside from this, some services even make money from reading user emails. In general, if you’re using an email provider that relies on advertisements, your emails and client files might be scanned by computers to deliver targeted messages.

Although not necessarily a security component, using a gmail.com, yahoo.com, hotmail.com or generic addresses doesn’t look as professional to clients as a custom domain. Fortunately, there are a variety of free email services that enable you to have a professional web presence regardless of your budget.

Risks of Using Cloud Technology

With cloud technology, one of the biggest risks with the systems is multi-tenancy. Simply put, this means that multiple, usually unrelated customers share the same computing resources (CPU power, storage, memory, namespace and physical buildings). Aside from this, there’s another notable risk to note which is ownership. Many of the largest cloud providers have clauses in their contracts that explicitly state that files stored on the provider’s systems are owned by the company, rather than the individual.

The main reason for this is because cloud vendors like the additional legal protections should something go wrong. They also can mine user information to find additional revenue opportunities for themselves. There have even been times when providers went out of business and sold user information as an asset to the next buyer.

Why the Cloud is More Secure Than Email

While cloud technology and email systems each have their downsides, cloud technology is still much more secure than email. The main reason for this is because there are numerous safeguards to keep tax documents secure and the servers up and running. Unlike email, tax files stored in the cloud are kept in a central encrypted hub. When you’re collaborating with clients, you won’t need to worry about sending files back and forth, or data being sent across unsecure channels.

What to Look for in a Cloud Vendor

When you’re looking at cloud technology providers, there are a few things you’ll want to consider before making a final decision. The first thing to look for is the service level agreements (SLAs), which is the level of reliability the provider promises to deliver. When evaluating SLAs, you’ll want to look for companies that offer at least 99 percent uptime. Security is another core element to consider when shopping for vendors. In general, you’ll want to ensure the provider meets PCI and SAS-70 standards.

Cost is another key consideration to keep in mind. For occasional usage, you might be able to make do with the free plans offered by providers, such as Box and Dropbox. If you have extensive storage needs, then you can expect to pay $10 or more per month for extra space.

Making Sense of it All

Ultimately, when it comes to sending tax documents, everything has its pros and cons. Although email is not ideal for sending sensitive information, it’s still a great tool for getting information across in an easy-to-use form. Cloud technology has a slight learning curve and requires a bit more effort, but it’s also much more secure. Once you get the hang of using cloud systems, then it becomes much easier to collaborate with others.

Editor’s note: Check out Intuit® Link, a cloud-based portal that makes it easy for your clients to deliver their tax data to you in a timely and organized way. Link utilizes 256-bit encryption and stores all data on U.S. servers to help keep data secure.