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:

1. 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.

2. 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.

3. 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.

4. 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.