Control-C is your only copy!
THE HIDDEN RISKS: Breach of Contract
Many Xero users, and their trusted accountant, are unaware that they are in breach of Xero’s Terms of Use by not maintaining a local backup of their financial data. This oversight exposes them to significant risks:
Breach of Contract: Xero’s Terms of Use are a legally binding contract that outlines the rights and responsibilities of both Xero and its users.
By using Xero, your clients agree to abide by these terms, which explicitly state that users are responsible for maintaining their own backups.
Failing to comply with this term could result in limitations on their ability to use Xero’s services or even account termination.
Xero Partners not having a backup in place or not obtaining informed consent demonstrates a blatant disregard for the integrity of the agreement and exposes their clients to significant risk. In the event of data loss, they will have no recourse against Xero, as they have violated the terms of service they agreed to upon signing up.
If you are a user of Xero, ‘you’ are responsible for backing up your data.
Xero clearly state that...
" You are responsible for maintaining copies of your data entered into our services."
Here is a sample of what our customers had to say. For a full list, please click on any of the reviews to take you to the Xero App Store rating.
Responsible Xero Partners
Informed consent:
Xero Partners: Ensure Your Clients’ Informed Consent Now
Informed consent is non-negotiable. It means your clients fully understand the Xero subscription terms, including potential data privacy and security risks, before they commit. This is your responsibility as a trusted advisor.
Failing to secure informed consent exposes your clients to unnecessary risk and is a direct violation of your duty of care.
If you’ve recommended Xero, make absolutely sure your clients are aware of their obligation to back up their data. Non-compliance with Xero’s Terms of Use is a serious matter.
Lead by example:
- Thoroughly explain Xero’s terms and conditions in plain language.
- Provide resources for clients to independently review and understand their obligations.
- Document your client’s informed consent with a signed agreement.
Don’t wait. Protect your clients and your practice. Prioritise informed consent today.
Leading by example, here is a sample of the action taken by a couple of reputable, trusted advisors…
Greg Millar & Vanessa Williams – Directors
ALLIOTT NZ LTD
“When we recommend Xero to our clients our reputation is on the line. We use Control-C which is an additional back up of their data as a way to protect our goodwill and also give clients the peace of mind that their data is protected, safe and that we are looking after them.
Control-C is a great way to safeguard against the “uncontrollable” events in life.
In a world where we’re all future-proofing our businesses, we use this tool as another way to prove to our clients that we’re proactive and looking after their best interests.”
"Kiwitax Client Update Newsletter
Control-C - Data backup solution
Did you know Xero’s terms of use requires you to keep your own back-up of data stored within Xero?
Clause 37. of Xero’s terms of use states: “Data loss is an unavoidable risk when using any technology. You’re responsible for maintaining copies of your data entered into our services.”
If Xero has a system issue, their priority is to restore their data, not yours.
And furthermore, while IRD legislation allows financial data to be stored on international cloud-based accounting platforms such as Xero, you are also required to have a copy of your financial data available on hand should you lose access to such cloud-based services.
In light of this, we think it is very important to retain an independent copy of your financial data such that if the worst was to happen, you have a local copy available.
That’s where Control-C comes in. Control-C offers a simple automated back-up solution for Xero data users to maintain compliance with Xero’s terms of use and IRD’s electronic data retention requirements."
Non-Compliance Warning
As a business owner using Xero, you should absolutely be backing up or taking copies of your data.
While Xero does have robust security measures in place and performs regular backups, their Terms of Use clearly state that:
You’re responsible for maintaining copies of your data entered into our services.
This means that Xero doesn’t guarantee against data loss and that the responsibility for safeguarding your data ultimately lies with you.
Why backing up your Xero data is crucial:
- Compliance: Some industries or regulatory bodies may require businesses to maintain copies of their financial records for specific periods. Regular backups help you comply with these requirements.
- Business continuity: In the event of a cyberattack or other security incident, having a backup can be essential for quickly restoring your operations and minimizing downtime.
- Data loss protection: Accidents happen, and technical glitches or unforeseen events can lead to data loss.Having a backup ensures you can recover your financial information and avoid significant disruptions to your business.
- Peace of mind: Knowing that you have a safe copy of your data can provide peace of mind and allow you to focus on running your business without worrying about potential data disasters.
How to back up your Xero data:
- Manual exports: Xero allows you to export your data in various formats, such as CSV or PDF. You can download these files and store them securely on an external hard drive or cloud storage.
- Third-party backup solutions: Control-C integrates with Xero and automates the backup process. This solutions offer additional features like versioning, encryption for enhanced data protection and a quick Recovery Time Objective(RTO).
Recommendations:
- Create a backup schedule: Establish a regular backup schedule, such as daily, weekly, or monthly, depending on the frequency of changes to your data.
- Store backups securely: Keep your backups in a safe location, either offline (e.g., external hard drive) or online (e.g., encrypted cloud storage).
- Test your backups: Regularly test your backups to ensure you can successfully restore your data if needed, in accordance with your Business Continuity Plan (BCP).
- Review Xero’s Terms of Use: Familiarise yourself with the relevant sections of Xero’s Terms of Use to fully understand your responsibilities regarding data backups and other aspects.
By taking these proactive steps, you can protect your valuable financial data and ensure the continuity of your business operations, even in the face of unexpected events.
While Xero does perform regular backups of their system for disaster recovery and data integrity purposes, you as the business owner are ultimately responsible for backing up your own Xero data.
This is explicitly stated in Xero’s Terms of Use, which emphasizes that you are responsible for maintaining copies of your data entered into their services.
Why Xero doesn’t take full responsibility:
- Data ownership: Your business data belongs to you, and Xero acts as a custodian of that data. They provide the platform and tools to manage it, but the responsibility for safeguarding your own data lies with you.
- Data loss scenarios: Xero’s backups are designed to protect against system-wide failures and data corruption.However, they may do not cover scenarios like accidental deletion by users, malware attacks targeting your specific account, or other localised data loss events such as disgruntled employees.
How to ensure your data is backed up:
- Regularly export your data: Xero provides various ways to export your data, including manual exports to CSV or PDF formats. You should establish a regular backup schedule and store these exports in a secure location (e.g.,external hard drive or cloud storage).
- Utilise third-party backup solutions: Many third-party apps integrate with Xero and offer automated backup solutions with additional features like versioning and encryption.
- Consider Xero’s backup add-on: Xero offers a paid backup service as an add-on, Control-,C which automatically backs up your data to a secure location.
By taking proactive measures to back up your Xero data, you can ensure that you have a copy of your valuable financial information readily available in case of any unforeseen events. This will help you maintain business continuity and avoid potential losses due to data loss.
Even if your accountant is the subscriber to your Xero account, the responsibility for backing up the data ultimately rests with YOU, the business owner.
Here’s why:
Data Ownership: While your accountant may manage the Xero subscription and have access to the data, the financial information in Xero belongs to your business. It’s your responsibility to ensure its safe keeping and availability.
Xero’s Terms of Use: Xero’s Terms of Use explicitly state that users are responsible for maintaining their own copies of the data entered into the service. This applies regardless of who the subscriber is.
Business Continuity: Backing up your data is a critical part of your business continuity plan. In case of data loss due to technical issues, accidental deletion, or even a dispute with your accountant, having your own backup ensures that your business operations can continue uninterrupted.
Accountant-Client Relationship: While your accountant may offer assistance in setting up backups or recommend backup solutions, it’s not their sole responsibility to ensure your data is backed up. Their primary role is to provide accounting and financial services, not data management.
How to address the backup responsibility:
Discuss with your accountant: Have an open conversation with your accountant about data backups. Clarify who is responsible for performing backups, how often they should be done, and where the backups will be stored.
Establish a backup process: Decide on a backup method that works for your business. You can either manually export data from Xero or use a third-party backup solution that integrates with Xero.
Regularly review and test backups: Ensure that your backups are being performed as scheduled and that you can successfully restore the data if needed.
Consider a written agreement: If necessary, create a written agreement with your accountant outlining the responsibilities for data backups and other aspects of your Xero subscription management.
By taking these proactive steps, you can ensure that your business’s financial data is protected and readily available,regardless of who manages the Xero subscription.
Xero partners should definitely read and understand the Xero Terms of Use. It’s a crucial part of their responsibility as trusted advisors to their clients.
Why it’s important for Xero partners to understand the Terms of Use:
- Liability: The Terms of Use outline the rights and responsibilities of both Xero and its users. Understanding these terms is essential to protect both the partner and their clients from potential legal issues.
- Data protection: The Terms of Use cover important aspects of data protection, including Xero’s obligations regarding data security and the user’s responsibility for maintaining backups of their data. Partners should be able to advise their clients on these matters to ensure their data is safe.
- Service limitations: The Terms of Use also outline the limitations of Xero’s services. Partners need to be aware of these limitations to set realistic expectations for their clients and avoid misunderstandings.
Why sharing this information with clients is important:
- Informed consent: Clients need to understand the terms they are agreeing to when they use Xero. Partners have a responsibility to ensure their clients are fully informed about their rights and obligations.
- Data protection: By informing clients about their responsibility to maintain backups, partners can help prevent data loss and minimize the impact of potential technical issues.
- Dispute resolution: In the event of a dispute, having a clear understanding of the Terms of Use can help resolve the issue more efficiently and amicably.
Best practices for Xero partners:
- Read and understand the Terms of Use: Partners should thoroughly review the Terms of Use and ensure they understand all the key provisions.
- Communicate with clients: Partners should proactively communicate the key points of the Terms of Use to their clients, emphasizing the importance of data backups and other relevant aspects.
- Provide resources: Partners can provide clients with links to the Xero Terms of Use and other relevant resources to help them understand their rights and responsibilities.
- Stay up-to-date: Xero may update the Terms of Use from time to time, so partners should make sure they are always aware of the latest version and inform their clients of any changes.
By taking these steps, Xero partners can ensure that their clients are well-informed and protected, while also fulfilling their own legal and ethical obligations.