Does Xero Backup My Data? What Happens If You Lose Your Xero Data?
Yes, Xero does do backups. But so should you!
As a Xero user, you're undoubtedly confident in the platform's reliability for managing your accounts. But have you ever paused to consider what 'backup' truly means when it comes to your critical financial data? Many assume their data is completely safe, but understanding Xero's role versus your own is crucial for safeguarding your business.
1. Understanding Xero's Role in Data Backup
Xero don't give detailed information about how they do backups, but they are ISO27001 and SOC 2 certified. These standards include specific controls for backup management, including requirements for regular backup procedures, testing backup integrity, and ensuring backups can be restored when needed. The standards include recommendations for backup frequency, storage locations, encryption of backup media, and regular testing procedures.
Given Xero migrated much of their infrastructure to Amazon Web Services, a top tier cloud infrastructure provider, we can take further comfort in the security and durability of the data.
Xero's backups protect against their system failures but not a customer's e.g. accidental deletion, cyber incident etc. Also, their best efforts to recover from failure might not be enough, and Xero makes it clear in their terms and conditions that customers should also keep their own copies of the data.
While Xero stores your data and keeps backups, the focus of those backups is on system restoration to a specific point in time when a usable backup was made. They may have to go back further in time if the backups contain corrupted data. Backups and point-in-time recoveries can, and often will, result in some data loss (i.e. everything that was done since the backup used for the restoration). That could be the last five minutes, but it might be a lot longer. It might even be all the data depending on the nature of the failure (e.g. ransomware).
While rare, if a system failure or compromise on Xero's side were to lead to data or file loss, customers just need a simple 'plan B' to retain access to their complete financial records and supporting files.
2. The High Cost of Lost Xero Data and Attachments
Time And Effort: In the short term it might be possible to rescue some files from emails, physical copies or by contacting suppliers to re-issue invoices etc. Some might be unrecoverable. Recreating accounting records would be even more challenging. This is likely to be highly disruptive and harder the further back in time you need to go.
Simply put, at a minimum, it wastes a lot of valuable time. Numerint specifically supports keeping your complete Xero data safer, complementing Xero by giving you direct, independent access to your crucial accounting records and supporting documents, thereby mitigating the risks of data inaccessibility.
Compliance Nightmares & Audit Problems: It might be possible to get along without files up until the moment a government authority such as UK's HMRC chooses to do an audit. Tax authorities require businesses to keep detailed records, including supporting documentation for expenses, income, and VAT. Missing attachments can lead to serious compliance issues, difficulties during audits, and penalties. If you claim VAT but can't produce the original invoice/receipt later, your claim could be disallowed, resulting in back taxes and penalties.
3. How Attachment Loss Specifically Impacts Tax Compliance and VAT Returns
Your Evidence: Every expense, every income entry, ideally has a corresponding document. Without these, your tax position can be challenged leading to back taxes, interest and penalties.
Authorities such as HMRC (UK), ATO (Australia), IRD (New Zealand), IRAS (Singapore), IRS (US), BZSt (Germany) or IRD (Hong Kong) require records to be kept for between five and ten years. Data loss of this magnitude could have significant implications.
4. Numerint: Your Solution for Uninterrupted Access to Complete Xero Data and Attachments
Numerint is an extremely simple tool that empowers businesses to take proactive control of their complete Xero data and files. It complements Xero by giving you direct, independent access to your accounting records and files, mitigating the risks of data inaccessibility.
Users sign in using their existing Xero credentials, click the backup button, and all accounting data plus attachments are downloaded to their desktop as a single ZIP archive file. The accounting data is provided in both JSON and Excel formats, while attachments retain their original format. These can then be filed safely according to your own company policy for storing data. Users can come back on a regular basis and create a new incremental backup to capture new data and files. This will create a series of ZIP archive files allowing you to go back to different points in time (i.e. to find previous versions).
Numerint includes comprehensive accounting data in both raw JSON and a hyperlinked Excel workbook with multiple worksheets covering all your transactions, contacts, accounts, and more. This makes it very easy to search and filter for the files you are looking for. For example, trying to find specific bills associated to specific accounting codes for specific amounts in a particular accounting period. Finding those files amongst potentially tens of thousands of files suddenly becomes simple and fast and will work on any computer today and ten years from now without any dependency on Xero or Numerint.
Future-Proofing Compliance & Peace of Mind: Numerint backup aids compliancy with long-term data retention requirements, makes audits smoother, and provides genuine peace of mind, knowing your complete financial dataset is always safe and accessible, regardless of your Xero subscription status or any unforeseen events.
Conclusion: Safeguard Your Business with Proactive Data Management
While Xero excels at managing your day-to-day accounts, true business resilience means having complete, independent control over your critical financial data and attachments. Don't leave your compliance and peace of mind to chance. Numerint provides the most-simple, reliable, cost-effective solution to secure your complete Xero data and files, ensuring it's always accessible when you need it most even if that's five or ten years from now.
Visit Numerint.com today to get your personalised quote and gain full control over your vital Xero data.