5 Critical Reasons Data Backup is Vital for Your Business

Time and again, you’ve been told by your IT provider that your company should back up its data. The possibility of getting hacked or ransomed, and losing sensitive information to criminals is real and present. Injected malware can corrupt your hard-earned information and disgruntled employees or other insider threats can mishandle your valuable digital assets. 

Losing organizational data can potentially cause irreversible damage. Which makes backup data critical for all companies, large and small. But first, what is a data backup?

What is a data backup?

A backup is a technical process of saving copies of your data in a secondary location. This can include documents, media files, images, application data, and settings. Essentially, any information you want to preserve can be stored as backup data. 

The data copies are created to ensure recovery and can be utilized for audit and compliance purposes and are important when migrating or integrating information from one platform to another. Backups are also designed to meet the requirements of data retention policies. 

Types of data backup explained

So what kinds of backups should your organization consider? There are a handful of options to choose from that differ in scope and time needed to execute. Here are the typical types of data backups you may want to leverage.  

Full backups

A full backup involves copying the entire data set of the system into a separate partition or onto an external disk. Here a full copy of the specified data volume is created which requires an abundance of free disk space so the copy can be adequately stored. In addition, a backup of the entire system is quite time-consuming– and not practical on a daily basis.

Most companies schedule full backups on a daily, weekly, or biweekly basis, running incremental or differential backups in between. The frequency of full backups mainly depends on the size of the company.

Pros:

• Provides the best data recovery protection.
• Fast recovery of data in a single backup set.

Cons:

• Backup is time-consuming.
• Requires more storage space.
• Uses up a lot of bandwidth.

Mirror backups

A mirror backup is similar to a full backup. It creates an exact copy of the source data set, but only the latest data version is stored in the backup repository with no track of different versions of the files. Because all individual backup files are stored separately rather than stored in a single compressed/encrypted container file—this allows for direct access to backup files without performing a restore operation. The source data is “mirrored” by the mirror backup file. Further on, the mirror backup copies only modified files.

Pros:

• Fast recovery.
• Direct access to individual files.

Cons:

• High storage space requirements. 
• High risk of unauthorized access and data corruption.

Incremental backups

An incremental backup is a resource-friendly alternative to a full backup. This setup is designed only to back up data that has changed since the previous backup. Therefore, it exclusively saves data that has been modified or added to the existing data volume.

Example: An administrator can arrange a full backup of the data set on Monday and then incremental backups between Tuesday and Friday. Therefore, on Tuesday, it creates copies of any changes that have been made since Monday. Next, on Wednesday, it will back up any changes made since Tuesday, and so on.

This method is more efficient as it takes up less space on the system. Since the sets are smaller compared to the volume set, they take less time to back up. The downside is that each incremental backup depends on the one before it. Suggesting that any damage or loss on one of the sets may inflict incomplete data recovery. Having a larger number of backup sets also affects recovery time.

Pros:

• Smaller backups take up less storage space.
• Faster to backup.
• Uses less bandwidth.

Cons:

• Time-consuming to recover.
• Risk of failed recovery if there is damage to a segment in the backup chain.

Differential backups

A differential backup is similar to incremental as it relies on a full backup, followed by saving only the changes made on that source volume. However, it differs in the way these changes are saved. Differential backups only save changes made since the last full backup while incremental backups save all changes made since the last backup.

In this setup, the backup sets do not rely on each other, but rather on the full backup from which they originated. As they only consist of two backup sets, their recovery time is much better. This provides better data protection and a valid disaster recovery solution.

Pros:

• Faster to back up compared to full backups.
• Quicker to restore as it only has two backup sets.
• Takes up less space than full backups.

Cons:

• Takes up more space than incremental backups.
• Slower to back up compared to incremental backups.

The Power of automated backups 

Often backups do not occur unless an organization has established a data backup process and team. However, backing up data as often as possible is a smart move. Automated backup, in which a backup engine is programmed to perform specific activities during scheduled occurrences, can address that challenge. 

Simplifying the backup process through automated scheduling is the first benefit of automated backups, allowing an organization to “set it and forget it.”

Another benefit of automated backups is addressing file loss. The chances of lost data having been backed up improve with automated backups. Regularly scheduled backups of active files, databases, virtual machines, and other applications can improve disaster recovery and, by extension, business continuity. 

Whether on-site or remotely stored, the availability of regularly backed up files and systems increases the likelihood of an organization’s successful recovery from a system outage or a malware attack.

Why is it important for businesses to back up their data? 

Now that you have insight into what a backup consists of, let’s explore why implementing a backup program—regardless of the size of your business—is crucial. Backups protect you in the event of human errors, hardware failure, virus attacks, power failure, and natural disasters. In the next section, we’ll cover five key considerations that support the value of implementing regular backups in your organizational processes.

1. Time equals money 

Every moment you spend with less data than you can typically access is time spent at less than ideal productivity. When your data is not backed up, you lose valuable time chasing down the information required to successfully operate your business. 

Example: If financial data is lost or incomplete, you’ll likely be working with outdated records and inaccurate accounting information. This most often leads to poor decision making, inaccurate statements submitted for loans or for taxes –and lastly, could require a costly data recovery process. 

With the implementation of automated backups, the convenience of automatic offsite storage without the added effort and expense of creating and managing physical backup copies comes alive.

2. Accessibility 

Data loss without a backup file can be paralyzing for your business. How would your business be impacted if a natural disaster occurred or onsite equipment failed? How would you continue to operate? Even under normal operations, your data needs to be backed up externally from your network or online application. 

Without this utility, you can find yourself at a serious disadvantage, unable to access critical information and files on hand. The ability to access your data anywhere means quick resolution for customer needs, and up-to-date, consistent information—wherever you are, whenever you need it.

3. Security and compliance

In today’s business climate, ensuring that your data or customer information is compliant and safe is crucial. Consumer trust and brand reputation go hand in hand. Loss or breach of critical data can be fatal for a business. Customers will often leave as a consequence, and violations of federal and state regulations are swiftly levied. 

This can subject your business to pre-compliance costs and additional fines. The government now also has a justifiable cause to investigate your business for any foul play, causing you to lose more valuable time and further damage your brand reputation. 

Data breaches and identity thefts are ubiquitous and often enormous in size and scope. For example, during the first six months of 2019, data breaches exposed 4.1 billion private records (“Data Breaches Expose 4.1 Billion Records in First Six Months of 2019,” by Davey Winder, Forbes (Aug. 20, 2019)). Businesses that are targeted experience staggering losses.

A byproduct of data breaches is often identity theft. Data breaches cost U.S. companies $8.19 million apiece on average (“What’s the Cost of a Data Breach in 2019?” by Chris Brook, Digital Guardian (July 30, 2019)). In many instances, the larger cost is the loss of customer confidence, which often evaporates after a cyber incident

4. Auditing preparedness

Given the money at stake, the tax consequences of data breaches and identity theft are worthy of exploration. Taxpayers who experience data breaches and identity theft often experience a financial loss for which they can seek tax relief. The ability to effectively pursue these losses is directly related to a thorough Data Breach Response Plan. 

A regularly updated and practiced response plan, whether it is a few thousand or a few million records compromised, helps to ensure auditing requirements are met. Also known as security breach response plans or cyber incident response plans—these plans help businesses appropriately respond to cybersecurity attacks by providing the necessary steps to respond in a straightforward, documented manner. 

There are various data breach response plan templates to utilize. Depending on the size of the business, they can be a few pages to several hundred pages long. They can include a variety of elements that are particular to your small business, including:

• Information on how to protect confidential company data, such as financial information, customer data, or internal technologies.
• Management of device and system passwords.
• Guidance for the secure transfer of company or client data.
• Instructions for the secure use of personal and company devices.
• Directions for detecting malicious or scam emails or virus infections.
• Procedures for remote workers.

5. Direct cost 

Even if your data can be fully or partially recovered, this can be expensive and will be a direct hit to your business. On top of fines and loss of revenue, your business will be paying for an expensive service that may not even recover all your data. 

If you are subject to a data loss that also impacts your financial and/or payroll systems, you may be forced to go through lengthy accounting records to reconcile. This is again where the power of automated backups becomes crucial to your bottom line.

Backup your information and do what’s best for your business

Following best practices to backup critical data for these five reasons can bring enormous peace of mind. The stability and health of your business are directly safeguarded. Incremental local backups are appropriate for less critical information, but the most important data—financial data, client details, etc—should be backed up to a cloud location.

Data backups are invaluable to your business. They are your failsafe, should the worst happen. Having data backups will save you time and money, give you a competitive edge and guarantee business continuity. And having data backups of your financial data will ensure continuity in daily reconciliation. 

Learn more about how LivePlan + QuickBooks Advanced can help you automate this process and access your financial information anytime, anywhere!

An accounting industry veteran, David Glantz co-founded Business Cents more than fifteen years ago and is recognized today as one of the leading consultants in the implementation of business systems, from accounting and retail/hospitality/POS to inventory management and data migration.