APL Accounting News February 2016
How safe is your data?
Perhaps now is a good time to look at one of the most important assets your business owns – your data and customer database.
At the end of this article we will give you a checklist to send to your software provider, and the answers that you should receive. If they cannot provide you with all the items in the checklist, then your data is at risk and you should take steps to better protect your data.
When you come to having your business valued to introduce a partner or to retire, essentially what they are buying is your customer base. Yes, an accountant can do all sorts of funky calculations to work out the future earnings potential of the business, but it still boils down to the fact that the most significant component of your business value is your customer base.
So if your customer base is your most important asset, then how safe is it? Where do you store your customer base, and do you have assurance that it is backed up? Can you imagine the consequences of what would happen if you got to work one morning and realised that all your data was missing?
Let’s paint a not so pretty picture for you of what would happen if your computer systems were down:
- you would have no idea of which appointments are due for the day
- when people arrive you would have no way of raising invoices, you would not be able to sell anything.
- every patient you see that needs a reminder set would lose that reminder meaning that in 6 months to 1 year, you will still have revenue losses as a result of your lost reminders.
- you would be unable to send out due reminders which we know costs a practice in excess of $40,000 per full time vet per year.
- you would lose all contact information such as telephone numbers and email addresses.
- you would be unable to view past histories and see what medications patients are on.
So effectively, although you could service some customers coming through the door in a primitive manual manner, your ability to continue business effectively is completely compromised.
With the above factors in mind, it is no surprise that any business that suffers complete and permanent data loss of this nature has a 50% chance of shutting down within the next 12 months!
Of course permanent data loss is very different from temporary loss of access to your data. If a computer system goes down but the data is well backed up and can be recovered within 24 hours, then revenue losses are minimal. The key element as a business owner therefore is to make sure your data is both backed up AND that the backup is not corrupt.
Looking at data loss must be divided into two key areas these days as the procedures around recovering your data are completely different. These two areas are 1) Is your practice management system cloud based 2) Or are you on an in-house server system.
In house Servers
With in house servers, the procedure around the backing up of the data and the storage of backups is usually under the control of the business itself, depending on the contract you have with your software provider. In many cases, with these systems business owners feel a bit more comfortable in that they have a physical copy of their backup in the clinic that they can see for themselves. However the reality of this type of backup when we have audited it, is that over 70% of clinics backing up an in house server have corrupted backups that are of no use! Imagine that, thinking that you are safe whilst in reality, something as simple as water damage to your server or a break-in can put an end to your business. If you are unable to fulfil the requirements in the checklist at the end of this article, you should consider contracting a local hardware service to perform the tasks provided in the checklist.
With the advent of cloud systems, there is now a concerning aspect around how your data is backed up and whether or not you are able to access it. Whilst it is generally accepted that cloud systems have better backups than in house systems, you cannot simply assume that your provider is doing this properly and bury your head in the sand. It would be disastrous to find out only when there has been a data problem that not all criteria regarding the safekeeping of your data have been fulfilled – you need to ask the questions. The second issue with regards to cloud systems is about ownership of data, with many cloud providers seeming reluctant to offer any sort of backup copy to their customers on a regular basis. Our view is that these providers should be put to the test to see if they can provide such a copy on a frequent and regular basis.
So let’s get down to a checklist with the desired answers. Send this list to your software provider, or if you manage your own in house backups complete it yourself. Once completed, send it back to us at APL Accountants so we can keep track of how you are managing your data.
Checklist – Is my data safe?
Simply send the questions to your data provider and see if their answers fulfil the requirements and are similar to the desirable answer.
Once you have your providers responses email them back to us at email@example.com
|What is the name of your system?|
|How often do you perform a back up of my system?||Every 24 hours at least. Backups should be done at least once daily or more frequently|
|When my data is backed up do you ever perform test restores of my data to ensure that the data is not corrupted and that your data recovery program actually works?||Test restores should be performed periodically, probably once a month to make sure that data is not corrupted and that the software providerhas a working disaster recovery program.|
|When the data is restored in a test restore do you do anything to make sure that the backup is up to date and holds the most current data?||Backed up data should be checked that the backup contains data from the last 24 hours|
|Where are my backups kept? Do you transfer my data to a different physical location so that it is held in 2 different geographical locations and is protected from natural disasters (eg. cyclones) or fire?||Backups should be kept at a different physical location. eg for an in-house backup, the backup should be moved off site every night. For a cloud system, your provider should transfer backups to a different geographical location|
|Are you able to provide me with a copy of ALL my data at least on a weekly basis in a format that is not password protected and that allows me to use my data for alternate purposes. All my data would include patient records, client records, all clinical notes, all invoices, all reminders and all stock items as a minimum.||This is really about ownership of data. If a provider is unwilling to provide you with a regular copy of your data then you should be asking ‘who really owns my data?’|
Remember, it’s well worthwhile asking the questions above, or if you are responsible for your own data, assessing whether you can fulfil the above requirements. This data is your most important asset, it’s worth taking 5 minutes to assess how at risk it is, and if any of the above criteria are not met, your business is on thin ice.
Automation creates efficiency!
Zack is a dog who is a couch potato and has an unusual life experience. His owners who were once exciting vets have now become boring accountants. They used to bring him into the exciting vet practice every day, now they bring him into a boring accounting office every day. This gives him a unique dog’s eye view on both professions.
Pictured above: It’s powernap time at APL!
We don’t talk much about automation in the veterinary industry, and perhaps we should. I noticed this when Mom and Dad were vets – no talk about automating procedures. Now in an accounting firm it’s all about automation – and getting computers to do the work gives us all time for an extra power nap each day because it saves us so much time.
What do we mean by ‘automation’ – in simple terms it means looking at one of the more repetitive tasks performed in your business and getting a computer program to do them instead of a person.
So perhaps automating processes has been underemphasised in the veterinary business. You might think that what has been learned from the accounting world would not transfer well to the veterinary market, but let’s look at some examples where automations are making a HUGE difference in veterinary practices:
- Automated reminder systems – where the computer system automatically sends out text messages and emails when reminders are due
- Procedure templates – simply click a button and a generic invoice for a particular procedure can be created in a second rather than 10 minutes
- Automated reporting – the ability of computer systems to generate consistent reports and automatically email them to business owners and their business advisors which only become available recently.
- Online appointment scheduling where clients can make their own appointments online.
There you have it, immediately I can give you 4 really good examples straight off the top of my canine head – and actually these are 4 examples of things we see only in cutting edge, extremely progressive practices, which are also incidentally more profitable.
This last month, we have further discovered the power of automations as we entered our largest quarterly reporting cycle ever. In the past the challenge has always been getting the information back from veterinary practices quickly enough. This year however, with the ability to automatically get data from many of our clients practice management systems using SmartVetApp, the information has been coming in quicker than ever. It has saved some clinics hours of time in getting the data to us and as a result they have been getting their reports back in a much more timely manner.
Now that’s something worth having a power nap over. For those of you who got the information to us so fast – go on, have a Zack power nap – you’ve earned it.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances. In particular, please note that ‘Zack’ is a dog and does not have opposable thumbs so has to type with his nose.