Over the years, working with hundreds of small businesses, I've seen how cybersecurity touches everything from your bank account to your customer trust. Data breaches and cyberattacks continue to increase, and the damage goes beyond lost data. They can cost you money, customers, and in some cases, the future of your business.
I want to help you avoid costly mistakes that come from weak cybersecurity in your financial systems. Drawing from my experience, I'll highlight the risks of outdated tools, share practical steps to strengthen your defenses, and explain how a fractional CFO is essential for building financial security into your business strategy.
The Hidden Cost of Old Financial Tools
Even if you're not a tech expert, you probably know that holding onto old financial software poses a serious risk. Every time you use outdated tools, you're inviting trouble. IBM's 2025 Cost of a Data Breach Report says data breaches cost businesses an average of around $4.4 million annually. While that number may sound huge, for many businesses it's devastating.
Small companies are often the favorite targets. Almost half of all cyberattacks hit small businesses, with 60 percent of those going out of business within six months. That's why I always stress the need to keep your financial tools current and secure.
How To Strengthen Your Security
My advice when stepping up your defenses usually includes moving financial work to the cloud. Cloud-based financial tools are built with security in mind. This change alone can protect your data better than most older systems. For example, the 2017 Equifax breach, which exposed 147 million records, was largely attributed to a vulnerability in outdated Apache Struts software. I've seen businesses save time and headaches by simply upgrading to better, more secure software.
Given that humans are prone to mistakes, I highly recommend implementing automation as an essential safeguard against potential errors. Automating tasks like invoicing and payroll reduces errors and weak points hackers exploit. And when your systems talk to each other, unexpected problems stand out faster.
Here's a checklist I always walk clients through:
- Multi-factor authentication and encryption. These are basic but powerful barriers. For example, multi-factor authentication means someone has to prove who they are in multiple ways before accessing sensitive data. It stops many hackers right away. Encryption, on the other hand, is like putting your information in a safe with a code only you know, so even if someone sneaks in, they can't open it.
- Regular software updates. Security patches fix vulnerabilities, so it's important to update your software regularly. I know some business owners hate interruptions, but think of updates as your business's digital bodyguard.
- Strong passwords and controlled access. Weak passwords are like handing out a spare key to strangers. Make passwords hard to guess and change them on a regular basis. Also, only grant access to people who really need it. This limits risk if someone's account is compromised.
- Automation to cut down errors. Automation improves efficiency by streamlining processes and reducing errors that could allow unauthorized access or security breaches. For example, automatically flagging unusual transactions can stop fraud early.
- Offline backups. Backing up your data to an offline medium means you can recover quickly when ransomware hits. I've seen businesses lose months of data because they didn't have backups disconnected from the network.
Why a Fractional CFO Should Be Part of Your Cybersecurity Plan
In my experience, businesses that successfully protect themselves have one thing in common: they've brought in a Fractional CFO or CFO advisory services to build security into their financial operations. Many owners don't realize how much these experts can reduce risk. Fractional CFOs bring enterprise-level financial security to your small business. They design internal controls that prevent unauthorized access, implement fraud detection systems that flag suspicious activity in real-time, conduct vendor security audits to protect your data, create incident response plans so you're not scrambling during a breach, and ensure compliance with financial regulations that protect you from liability.
Having a fractional CFO means you're not dealing with surprises alone. They bring confidence and a plan for security as your business grows. Their advice is a steady hand in what can feel like a stormy market.
Taking Steps Now for a Secure Future
When cybersecurity and finance work together, you build a business that can survive unexpected threats. Think of it as a key part of your financial strategy. Over the years, I've seen how businesses that treat security this way avoid the worst pitfalls.
Take time this year to review your financial tech and internal processes. Ask yourself hard questions. Are your tools up to date? Do your systems integrate? Do you have a plan in case things go wrong? If you don't have clear answers to these questions, it's time to bring in expert financial leadership. A fractional CFO from Bookkeeper360 can assess your current security posture, identify vulnerabilities in your financial systems, and implement controls that protect your business without breaking your budget. Schedule a consultation today to learn how CFO advisory services can safeguard your financial future.
You've put too much into your business to risk losing it. Act now. Protect what you've built for 2026 and beyond.
About the Author: Nick Pasquarosa is the Founder and CEO of Bookkeeper360, a technology-driven accounting solution helping small businesses streamline accounting, payroll, tax, and advisory services. Since launching the company in 2012, he has scaled it into a nationally recognized firm, earning recognition from Forbes, Inc. 5000, NerdWallet, and CPA Practice Advisor. Nick has advised leading platforms such as Xero, Bill.com, Gusto, and FreshBooks, and was named a "20 under 40" influencer by CPA Practice Advisor. He is an active member of the Entrepreneurs' Organization (EO), Young Presidents' Organization (YPO), and the Hampton Entrepreneurs community.