The Real Impact of Data Loss in QuickBooks Online – Time, Money, Trust

11 Dec 2024

7 mins

Ridhima Gupta

At a glance

QuickBooks Online lacks a recycle bin, making accidental deletions permanent and recovery manual. Compliance violations can lead to fines up to $60,000. Ransomware attacks and cloud outages disrupt access to critical data. Native tools offer basic backups but lack granular recovery options.

Total Costs of Backup Methods

Manual Export/Import: $76,200 – Labor-intensive, prone to errors, and inefficient.

QuickBooks Online (QBO) powers the financial operations of over 6.5 million businesses worldwide. For businesses, CPAs, and CAS providers alike, it’s a critical tool for managing financial data, reconciling accounts, and ensuring compliance.

Yet, despite its widespread adoption, many businesses overlook one critical vulnerability: the potential for data loss. Without proper safeguards, data loss can disrupt operations, compromise compliance, and erode client trust.

Data loss instances faced by QBO customers:

Accidental deletions: Simple mistakes, such as accidently deleting a transaction, can have far-reaching consequences. Moreover, QuickBooks Online (QBO) lacks a recycle bin, meaning that any deletion—accidental or intentional—cannot be undone within the platform. Without a reliable recovery mechanism, businesses face hours of manual effort trying to recreate lost records, and in some cases, permanent loss of critical financial data.
Compliance risks: Mishandling sensitive financial data can result in severe penalties. A prominent example is Morgan Stanley’s $60 million fine for failing to decommission data securely.
Ransomware attacks: With rising ransomware attacks, businesses risk losing or having their data shared over cloud encrypted. Without timely recovery solutions, the downtime alone can cripple operations.
Cloud outages: Cloud-based systems, including QBO, are susceptible to service disruptions. For instance, on September 1, 2023, users reported login issues and system failures with QuickBooks Online, preventing access to financial data and hindering critical business functions.
Limited backup options: Many QBO users have voiced concerns over its lack of robust recovery features. Even with periodic snapshots, recovering specific data efficiently remains a challenge.

These challenges highlight why every QBO user—whether managing a single company or a portfolio of clients—requires a robust backup strategy. Without one, businesses face prolonged downtime, potential compliance violations, and even reputational damage. For CPAs and CAS providers managing multiple client accounts, the stakes are higher due to the sheer complexity of overseeing financial data for numerous independent companies.

So, what’s the solution?

To combat these risks, businesses need a reliable backup and recovery strategy. While QuickBooks Online (QBO) offers critical features for financial management, it falls short in ensuring comprehensive data protection. Fortunately, there are three key ways to back up your QBO data:

1.Manual exports and import This method involves manually exporting your financial data from QBO, securely storing it on external platforms, and then importing it back to QBO. While cost-effective, it’s labor-intensive and prone to human error. Miss an export or encounter file corruption, and you risk significant data gaps during recovery.

2.QBO’s native backup and restore tool QBO’s offers built-in backup tool that automates periodic snapshots, reducing manual effort. However, lack of options for granular recovery (like restoring a single transaction) is one of the major limitations.

3.Third-party backup solutions Third party solutions like SysCloud offer automated and granular backups, allowing businesses to restore specific records or entire datasets effortlessly. These tools also provide advanced features like compliance monitoring, ransomware protection, and real-time recovery, ensuring minimal downtime and data loss.

The effectiveness of any of these backup solution rests on three critical metrics:

Recovery time objective (RTO): This measures how quickly operations can resume after a data loss incident. Example: Imagine a CPA firm using QBO and OneDrive to manage financial data. If OneDrive data becomes inaccessible due to ransomware attack and the backup solution has a high RTO (e.g., several days), the firm risks missing deadlines and losing clients. A low RTO ensures quick recovery, minimizing disruptions.
Recovery point objective (RPO): This measures how much data loss is acceptable between the last backup and the incident. Example: A CAS provider managing a client’s financial data requires access to a transaction from 18 months ago for an audit. However, QBO’s built-in backup tool only retains records for one year. Because the older data was neither exported nor stored securely, it becomes irretrievable.
Cost The cost of data loss isn’t just about the price of recovery—it’s about the ripple effects it creates across the business. CPAs and CAS providers often spend valuable time and resources restoring data, diverting focus from billable client work. This results in two types of financial losses: direct costs, which include the effort and time spent on recovery, and opportunity costs, where potential revenue is lost because the team is engaged in non-billable tasks.

Quantifying the impact of backup strategies in QuickBooks Online

Backing up your data is crucial, but the real test comes during recovery. How much time will it take? How much data might you lose? And what will it cost your business?

Let’s explore real-world scenarios to evaluate the trade-offs between manual export and import, QBO’s native tool, and SysCloud’s third-party solution in terms of RTO (Recovery Time Objective), RPO (Recovery Point Objective), and cost.

Disclaimer

These figures represent potential costs based on typical scenarios. Not every situation will involve all these factors. Calculations are based on estimated assumptions. Actual results may vary.

Assumptions for cost analysis

1. Labor cost: $100 per hour.

2.Time for common tasks:

Manually enter audit log: 1 hour per invoice to retrieve and cross-check details.

Audit log search: 2 hours due to lack of advanced filters.

Locating changes over a quarter: ~8 hours (4 hours/day for 2 days).

Manual export and deletion of records: 4 hours per 10,000 records due to bulk action limits.

3.Scale: Recovery Time Objective (RTO)

Low (1–4 hours): Recovery is quick, with minimal disruption to operations.

Medium (5–24 hours): Recovery takes part of or a full business day.

High (25+ hours): Extended downtime that disrupts multiple business days.

5.Scale: Recovery Point Objective (RPO)

Low (1–8 hours): Backup frequency is high (e.g., multiple backups per day), ensuring minimal data loss.

Medium (8–24 hours): Backup is performed daily, so the recovery point is limited to the last 24-hour snapshot, leading to moderate data loss.

High (25+ hours): Backup frequency is low or manual, resulting in significant data gaps.

6.SysCloud’s pricing for backup of 1 company: $20/ month.

7.SysCloud has the capability of providing 3x backup.

Use case 1: Restoring accidentally deleted records

Incident:

A customer accidentally deletes 20 invoices, which are critical for reconciling financial accounts. Without proper backup, restoring this data becomes a tedious process.

Calculations:

Manual export and import:

Time:

Identify deleted records using audit log = 2 hours

Manual recreation of 20 invoices = 20 hours (1 hour per invoice)

Cost: 22 hours × $100/hour = $2,200.

QBO native backup tool:

Time:

Identify deleted records using audit log = 2 hours

Manual recreation of 20 invoices = 20 hours (1 hour per invoice)

Cost: 22 hours × $100/hour = $2,200.

SysCloud backup:

Time:

Identify records with relevant tags (“Deleted” tags) and perform restores maintaining object-data relationships = Instant.

Cost: $20

Method	RTO	RPO	Cost	Impact
Manual export and import	Medium (22 hours)	> 24 hours	$2,200	Delayed operations, high manual effort.
QBO native backup tool	Medium (22 hours)	4 to 24 hours	$2,200	Similar to manual export and import due to lack of granular restore options
SysCloud backup	Low (<1 hour)	1 to 4 hours	$20	Immediate recovery, full data integrity, and no manual effort.

Get the full eBook for detailed, scenario-based cost and time analyses, along with proven strategies to safeguard your QBO data—ensuring peace of mind, compliance, and uninterrupted client trust.

In this article

The Real Impact of Data Loss in QuickBooks Online – Time, Money, Trust

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