How to manage GDPR risks in accounting outsourcing

With the General Data Protection Regulation (GDPR) in place, businesses must take extra care to manage GDPR risk when outsourcing accounting tasks. Outsourcing accounting to a third-party provider can expose a business to new data protection risks that must be addressed to ensure compliance with GDPR. In this article, we’ll discuss several strategies for managing GDPR risk when outsourcing accounting tasks.

1. Conduct due diligence: Before outsourcing accounting tasks, businesses must conduct due diligence on the third-party provider. This includes verifying the provider’s compliance with GDPR and assessing the provider’s data protection protocols. Businesses must ensure that their third-party provider is GDPR compliant and has implemented robust data protection measures to protect sensitive financial information.
2. Sign a GDPR compliant Data Processing Agreement: To ensure compliance with GDPR, businesses should sign a GDPR compliant Data Processing Agreement (DPA) with their third-party provider. This agreement should outline the data protection measures that the provider must put in place, as well as the provider’s obligations in the event of a data breach.
3. Implement data protection measures: Businesses must ensure that their third-party provider is implementing robust data protection measures to protect sensitive financial information. This includes measures such as encryption, pseudonymization, and regular backups. Businesses should also ensure that the provider is using secure methods to transfer sensitive financial information, such as virtual private networks (VPNs) or secure file transfer protocols (SFTPs).
4. Regularly monitor the provider: Businesses must regularly monitor their third-party provider to ensure that the provider is complying with the DPA and implementing robust data protection measures. This includes regular audits and assessments of the provider’s data protection protocols.
5. Have a GDPR compliant incident response plan: Businesses must ensure that their third-party provider has a GDPR compliant incident response plan in place to mitigate the risk of data breaches. This should include procedures for identifying, reporting and containing data breaches, as well as notifying the relevant authorities and affected individuals.

In conclusion, managing GDPR risk when outsourcing accounting tasks is crucial for businesses. By conducting due diligence on the third-party provider, signing a GDPR compliant DPA, implementing data protection measures, regularly monitoring the provider and having a GDPR compliant incident response plan in place, businesses can ensure that outsourcing accounting tasks is done in compliance with GDPR while minimizing any