Paperless? Do You Know Where Your Backups Are?

A member of the AICPA Group on LinkedIn posted a question about keeping paper records vs. the paperless office. In case you aren’t on the AICPA group on LinkedIn, here’s my reply:
I think the issue is not only that the offices are paperless, but that most small and mid-sized businesses don’t think about disaster recovery. With paper records, a fire can wipe them out, but fires are relatively infrequent. A computer–being a machine–will fail eventually.
I used to ask business owners, “Do you know where your backup from last night is?” Most got this panicked look in their eyes. A friend of mine called me to look at the IT situation at a largish insurance agency in town. I asked this question. The owner said, “Don’t know, let’s go see.” We walked down to the IT department (in the basement, one employee). I asked him where the backup was. He pointed to a tape sticking out of a tape drive. I asked him where the backup from the previous night was, he said, “Don’t have one. I know I’m supposed to change the tape, but I forget.”
As I walked out of the IT department, I said to the owner, “Did you see that stack of 10 or 12 tapes in shrink wrap sitting on top of the computer where the backup was?”
The owner answered, “Yes.”
I said, “They’re doing you a lot of good!”
He wasn’t happy.
Paperless is a disaster in cases like this. Backup. Disaster recovery. Often the last thought of business owners, but critically important.