A client calls, panicked. Their tax return was filed, but not by them.
Their refund? Gone. Their identity? Stolen. And now, they’re looking at you for answers.
It happens more often than you’d think. And it usually starts with something small—a weak password, a rushed email, a file sent to the wrong place.
Prevention lies in building a security culture that turns awareness into habit and keeps risks low. When your team knows what to watch for, threats have fewer ways in.
Ahead, learn how to strengthen security in your tax business and protect client data before it’s too late.
1. Teach Your Team to Recognize and Prevent Threats
Your employees handle sensitive data every day. If they don’t know what to watch for, they could be the reason a hacker gets in.
Make security training a priority. Teach your team how to:
- Recognize Phishing Emails
- Use Strong Passwords
- Protect Client Data
- Safely Navigate Tax Software
Hover over links before clicking, verify unexpected requests, and report anything suspicious.
Create a unique one for every account and secure it with multi-factor authentication.
Encrypt files, avoid sharing sensitive information over email, and follow secure storage protocols.
Understand security settings, limit sensitive file access, and update software.
Ongoing training keeps security top of mind and helps employees respond to threats before they become a problem.
2. Adopt a Secure Document Management System
It’s too easy for paper files to get lost or digital documents to end up in the wrong hands. Scattered records make it harder to keep client data secure.
A practice management software with built-in document management fixes that. It stores files in one secure, encrypted system and limits access to only those who need it.
Stop sending tax documents over email. Use an encrypted document management system for accountants that protects sensitive data and keeps everything in the right place.
3. Require Strong Passwords and Multi-Factor Authentication
Weak passwords let hackers in. Make sure everyone in your business uses long, complex passwords and doesn’t reuse them across accounts.
Use a secure password manager to store and protect login details. These tools can generate strong passwords and keep them secure with little effort.
It’s also a good idea to turn on multi-factor authentication (MFA) for all accounts. A second verification step, like a code from an authentication app, makes it difficult for adversaries to access your systems.
4. Implement Strong Access Controls
How many times have you heard about a tax firm facing a breach because they forgot to remove access when an employee left? Proper access control protects your firm from internal threats and accidental data exposure.
Assign Access Based on Roles
Give employees only the permissions they need for their job. For example, a junior tax preparer should only have access to client tax returns and not payroll records or financial statements.
Limit Access to Sensitive Data
Restrict access to things like Social Security numbers and financial records to only those you authorize.
Review Access Regularly
Check permissions at least every six months and immediately remove access when an employee changes roles or leaves the company.
5. Keep Software and Systems Up to Date
If you don’t update software, you’re giving hackers an easy way in. Enable automatic updates for tax tools, CPA practice management software, and operating systems. This ensures you always have the latest security fixes.
Another important step is keeping antivirus programs and firewalls current. Hackers create new threats all the time, and outdated security tools can’t keep up. Check for updates on business devices—computers, phones, and tablets—so nothing gets left behind.
6. Secure Your Digital Communication
You’re probably using email and messaging to talk to clients every day, but those channels can be a target for cyberattacks. Here’s what you can do to make sure your communications stay safe:
Use Encrypted Messaging Services
Look for a business messaging system for accountants or tax professionals with built-in security features. They are much safer than sending messages through regular email. If you must send emails, ensure they are encrypted so only the person you’re sending them to can read them.
Avoid Sending Personal or Financial Data Over Unsecured Platforms
Don’t email tax documents or client details. Instead, use an encrypted messaging service or document collaboration tools for accountants and tax preparers—They’re built to keep things secure.
7. Back Up Data Regularly
Losing data can shut down your business. A cyberattack, system crash, or even a simple mistake can wipe out files you can’t afford to lose. Without a backup, there’s no getting them back.
Set up automatic cloud backups to store and protect sensitive data. Use cloud-based accounting practice management software so you never risk losing client data—and it’s secure.
Don’t rely on a single backup—store copies in multiple locations, like encrypted cloud storage or external hard drives. If one fails, you’ll still have access.
8. Develop a Cybersecurity Incident Response Plan
Cyberattacks happen. If you don’t have a plan, minor issues turn into major problems. A clear response keeps damage under control.
First, know how to spot and contain a breach. Act quickly if you see unauthorized logins, missing files, or unusual activity. Shut down access, secure accounts, and investigate.
Next, be ready to notify affected clients and authorities. If client data is exposed, you may be required to report it. Have a process in place to do this quickly and correctly.
Finally, have a recovery plan. Restore lost data, patch security gaps, and update policies to prevent the same issue from happening again.
9. Monitor and Audit Security Practices Regularly
Security threats don’t wait. If you’re not checking for weak spots, you’re giving attackers an open door. Stay ahead by making regular security reviews part of your routine.
Find and Fix Security Gaps
Check for outdated software, weak passwords, and unauthorized access. Patch vulnerabilities before they turn into bigger problems.
Make Sure Employees Follow Security Policies
If people aren’t locking screens, using strong passwords, or handling client data properly, retrain them.
Review Your Bookkeeping Practice Management Software’s Settings
Adjust permissions, update security features, and remove access from anyone who doesn’t need it.
Security isn’t a one-time fix. Keep monitoring, keep improving, and don’t leave anything to chance.
Build a Security-First Culture
A security-first mindset means making cybersecurity a part of daily tasks rather than an afterthought. Employees log into systems, share files, and respond to emails without always considering the risks—this is where vulnerabilities arise.
To prevent lapses, build security habits into everyday habits and workflows. Require employees to lock screens before stepping away, enforce multi-factor authentication for logins, and ensure client data is stored only in approved systems. These small but powerful actions can significantly reduce risk without disrupting productivity.
With cyber threats growing more sophisticated each day, prioritizing security is no longer optional—it’s a necessity. Prioritizing security will mean the difference between a firm that thrives and one that faces financial and legal fallout in the years ahead. Take your first steps toward building a security-first culture today. The firms that act now will be the ones that stay ahead.
