Backing Up QuickBooks Data

One of the most important tasks for a business that uses computer is backing up your data. Everyone knows that you need to, few businesses do a proper job. In this article I’m going to discuss how you should be handling backups.

I can see your eyes glazing over in boredom already. “I do backups all the time, I’m protected.” “Backing up all the time takes too much work, I don’t have the time”. “I have a tech person who handles all of that”. When I run a tech audit of a new client I hear all those comments, and I usually find that the business has a major problem.

Why You Need a Backup Plan

Backups are boring, time consuming, and almost always put off until later. Many business people don’t understand what needs to be done – they treat their computer like a file cabinet that is holding all their papers safely and don’t do backups. Others will tell you that they DO take care of backups and do it often! In BOTH of these cases (and everyone in between) are at risk.

Consider the following points:

• Computers are not failsafe – they CAN lose information.
• People are not failsafe – they CAN accidentally erase files.
• People are not always honest, they CAN erase files (see this CNN video for an example).
• Disasters can happen – fires, floods, tornadoes, hurricanes, even power failures can destroy your files in a moment.
• Backup programs and hardware are not failsafe – backups are WORTHLESS unless you test them periodically.

Backup Philosophy

There are many ways that we can talk about this topic. I’m not going to get into the mechanical details of how to make backups at this time (I’ll be adding articles on this in the future). Right now I want to talk philosophy. My direct support clients are probably tired of hearing me lecture on the subject, it is one that I’m hyper about. But none of my clients have lost data (those that follow my recommendations). The key elements, in my mind, are:

1. Make backups often enough so that it isn’t painful to recreate lost work if you have a problem. If you enter a few transactions a day, if you lose a week’s worth of work it could easy to recreate that in a short time. Make weekly backups. If you enter several hundred transactions a day then losing even one day’s worth of work is a problem, so make backups daily.
2. Layer your backups. Have causal backups that are easy to make and are used often, intermediate backups that are more formal and are marked in a log, archival backups that mark major events (new month, end of fiscal year). You can add more layers than this depending on your situation.
3. Vary your backup methods. Don’t rely on just one backup method, such as copying to a CD. Use local backups, removeable media, on-line backups to the Internet. If one method fails for some reason, you have other methods.
4. Test your backup procedures. This is the concept that is missed most often. How do you know if your backups are any good? Don’t wait until a disaster to find out…

A Backup Plan

It’s difficult to list a “universal backup plan” in a blog like this. As a business consultant I would examine the way your computers are set up, the kind of work you do, the volume of transactions you are entering, the number of people involved, and so forth. A custom backup plan would be set up that would fit your business needs. I know that backups are a pain to do so we have to find a balance between security and convenience – the most comprehensive backup plan won’t work if it is too much trouble to implement!

Here is a fairly generic plan to start with:

• I would set up an on-line Internet backup program that would make copies of important files and folders automatically, moving data to an encrypted site without you having to do any work. I have several options here, which I discuss in my article about online backups.
• Every day, when the office shuts down, key files would be backed up to a different hard drive. Perhaps a file server, or a NAS storage device. This should be a fast backup and easy to do. In some cases this will be to a removable media (CD, DVD or tape). I like CD/DVD because they are cheap AND you don’t reuse the media. Tapes work for higher volumes, but due to the expense people tend to reuse them until they wear out. Managing reusable media is a whole topic of its own – if you want to hear about that let me know in the comments section and I’ll write an article. These backups should be marked clearly with the date and filed carefully.
• Weekly (if not more often) I’d make a backup to removable media to take off site. This could be the owner’s home for example. It must be a secure place, and a secure person.
• Monthly another backup would be made to removable media and be taken to an even more secure site. This should be a bank safety deposit box, for example. The media must be carefully marked as to the date, and a log should be kept. You can get rid of these backups when they get several years old (or move them back to your office) if you have limited space.
• Yearly (depending on your business type) you will make multiple backups. One goes to the safe deposit box (marked as a year-end backup), one goes to your accountant (if they will hold them for you), one goes to the owner’s home. Mark them clearly as a year end, and you do not get rid of old ones.

In addition to this there are two important procedures:

1. Use the Save Copy or Backup feature in QuickBooks (in the “file” menu) to make a backup copy (not a portable company file) at least once a month. This backup file (QBB) should be saved to a CD just like the weekly (or monthly) copies. This is a very important process that many QuickBooks users miss. People who make backup snapshots of their file system or file server tend to ignore this, thinking that they have taken care of making a backup, but there are other good reasons for doing this. Without going into a lot of detail, your QuickBooks database needs some “house cleaning” periodically. If you don’t do this, performance starts to suffer. QuickBooks is keeping a transaction log (a “TLG” file) which continues to grow as you use the program. If this gets too big your system starts to slow down. The only good way to handle this file is to run the QuickBooks backup procedure, which reconciles and reduces that file. If you have a multi user system you must run this backup from the same computer that is hosting the database.
2. Test your backups periodically. This is a critical procedure. If you are making backups it is because you may someday need to restore those backups. If a disaster happens and you need to restore, that is a terrible time to find out that you either don’t know how to restore, or that your backups weren’t working and you have bad data backed up. You must test your ability to restore a backup from each of the methods you are using, and you must validate that the backed up data is any good. I’ve run into situations where a backup was being made to a tape drive, with no errors being generated, but when you restored from that tape the data was found to be scrambled due to a hardware problem. Testing restore procedures is complicated, and very time consuming, but you should do it on a regular basis.

If you have taken the time to get this far in this article you deserve a pat on the back! It isn’t a fun topic to read, and it is a lot of work to follow through with, but it is critical to any business. Good backups are like insurance, you don’t want to have to use it but you absolutely need that protection. This is one of the cheapest kinds of insurance you can buy for your business.

Let me know what you think, and if you have any questions please ask! I’ll be writing more articles about specific parts of this article in the future.

Also see:

• Restoring QuickBooks Backups
• Using Online Backups