Yesterday, Bench.co, a sizable, outsourced bookkeeping and accounting service, announced its closure without notice. This announcement has sent spirals around the industry; Bench clients are fearful about data loss and timely access to their data, and accountants are trying to respond to the confusion. Many accountants are trying to assist clients who were using Bench while many others are taking a more defensive route, trying to use the sudden and extreme action of Bench to justify migrating to more, manual services through firms (entertainingly trying to convince those fleeing Bench to use them while on the opposite side of social media they are talking about all of the same tech they are trying to implement). But more than anything else, there are massive underlying concerns that need to be addressed and, quite frankly, have been requirements for a while now.
Business Continuity
The FTC Safeguards Rule and the recently proposed, updated Circular 230 both address the need for firms to maintain a business continuity plan. These plans are not just concerned with something unforeseen occurring to a firm owner, but also their ability to operate in unexpected circumstances, including natural disasters and impacts by vendors.
Vendor Management
The FTC Safeguards Rule also requires that firms monitor and manage their vendors – from internet service providers to cloud hosting services and software applications. Firms are expected to research, review, test, and manage their vendors, not just take a vendor’s marketing statements on compliance.
Data Ownership
We are in the data world now and most of the value in an organization is in the data they now have or collect. Data is the second most valuable asset at most organizations, only next to employees. Firms need to take extra steps to protect and backup their clients’ data, including reviewing software and vendor data management policies.
As time continues to evolve and AI has a growing and more impactful influence on accounting and financial services. This will require firms to be more diligent with data management, vendor selection, and business continuity planning. As reliance on technology increases, firm leadership must become more knowledgeable in how technology operates and influences firm operations.
This is all so overwhelming. How is a small firm supposed to stay up-to-date on all of these changes? Financial Guardians would like to introduce GuardianTrust…
Financial Guardians Members will have access to GuardianTrust, a vendor management tool. One of our experienced team members is currently working with industry-specific vendors to compile a grading and reviewing system. Each vendor will be assigned a letter grade from A+ to F with a grading matrix explaining areas they excel in and areas where they could use improvement.
The FTC Safeguards Rule requires that you regularly review, monitor, and assess your vendors. There is no other provider in the tax, bookkeeping, payroll, or financial services space providing this level of support on vendor selection.
This vendor review process will be independent of bias or persuasion from the individual vendors and no commissions, agreements, or endorsements will be accepted in exchange for reviews. The reviews and grading will be free from bias and ensure that you can confidently select vendors with strong adherence to industry and security requirements. Our list of upcoming vendors will be announced in early January.
After yesterday’s announcement from Bench, we felt it was critical to provide you with this update. More information will be coming in January 2025!
Subscribe today to be one of the first to access this new system and start 2025 off at a much higher level of compliance!
Financial Guardians is a proud member of InCite, the recently launched online community exclusively for tax professionals, bookkeepers, and accountants. InCite members receive a 30% discount.
