We all hear about how great the cloud is and how it is revolutionizing the way we do business, and it is. However, what do you do when the cloud is down?

There have been numerous instances this year alone when the cloud was down. I’m sure many accountants will remember when CCH Axcess tax software suffered a malware attack (https://www.accountingtoday.com/news/the-wolters-kluwer-cch-outage-what-happened)  on May 6. They were not able to recover from the attack until May 9, and this, in turn, put tax preparers behind on meeting the May 15 deadline for Form 990, “Return of Organization Exempt From Income Tax”; Form 1120, “U.S. Corporation Income Tax Return”; Forms 1120S, “U.S. Income Tax Return for an S Corporation”; and Forms 1065, “U.S. Return of Partnership Income.” 

The IRS ended up granting a waiver of the Sec. 6651 late-filing penalty because of the disruption the malware attack created. However, this attack really shed light on how vulnerable businesses are when relying on the cloud. 

It’s a reality of business today: It’s not a matter of if the cloud will go down, but when. Because of this, you need to have a plan. You need to know what to when the cloud goes down.

In a recent article titled “What to do before the cloud goes down,” (https://www.journalofaccountancy.com/news/2019/aug/when-cloud-software-goes-down-201921423.html) Journal of Accountancy Senior Editor Courtney L. Vien offers the following bits of excellent advice:

Have a plan
It’s important to have a plan no matter what, but it’s extremely important to have a plan for when things go wrong. If you’re in the midst of busy season and the cloud goes down, everyone can fall back on the contingency plan and know what is expected of them. The same would happen if you’re not in busy season; everyone would fall back on the contingency plan and continue working on the goals set in the plan. 

Have a backup
We’ve all heard the advice to diversify your investments. The same advice holds true for your backups. Be sure to not have all of your backups stored on the cloud. The cloud is an amazing tool, but if you’re relying solely on it to store all of your data, you’re essentially putting all of your money in one investment. You need to diversify your backups just like you would your investments. That means keeping copies of your backups off the cloud. This will allow your teams to continue working if a malware attack would ever hit your cloud storage. 

Business continuity insurance
This is an important item to consider. You’ll, of course, have to weigh the pros and cons of this type of insurance policy but having an insurance policy to reimburse you during downtime could be beneficial.

Do you have any suggestions that your company has implemented for when the cloud goes down? We’d love to hear them in the comments.