What is a VPN? How It Works and Why You Need One

Most people have heard the term VPN or virtual private network, yet not all accountants know precisely what a VPN is, how it works, and why they need one.

The main reason is data security, but that isn’t the only reason accounting firms should operate with a VPN. Enhanced network management, functionality, and convenience are also reasons to invest in a private network.

What is a VPN?

A VPN gives users privacy and anonymity while online. It does this by creating a private network over public internet connections. They mask actions and locations, among others, and make them virtually untraceable.

At their core, VPNs are essentially a tunnel. In fact, they are usually described using that term. Picture the internet as a cloud. Imagine a particular online session as a long stream of data bits working their way through that cloud to whatever site the user is surfing. 

The VPN is the tunnel that channels that data, securing it from being “grabbed” out of the cloud. It uses advanced data encryption to keep the information secure.

Why Should All Accountants Use a VPN?

A VPN service is not only an essential business tool, but users can also use them on their personal devices, like smartphones and tablets. Any device that can connect to the internet can use a VPN. Anytime someone uses an unsecured Wi-Fi network, they should use a VPN.

For instance, when traveling for business and someone needs to connect to company servers over a public network, they can connect to a VPN, securing their connection to the internet while also protecting data sets, file transfers, communications, and other essential business information. 

Peace of mind is probably the most significant reason people opt to use a VPN. Accounting firms and organizations that handle sensitive client data (social security and tax ID numbers, credit and debit card information, personal financial data, etc.) need a VPN. Here’s why:

An Additional Layer of Security

Cybersecurity breaches cost companies an estimated $1.5 trillion a year worldwide. VPNs add another layer of security to reduce these data breaches.

Protect Client Data

A firm’s reputation hinges on its ability to secure client data. Roughly 60% of small businesses that experience a data breach go out of business within six months of the attack. A VPN keeps malicious characters from accessing this sensitive data and placing these firms at risk.

Safeguard Firm Data

This data includes the firm’s IP address, locations, browsing history, devices, calls, etc. It also protects this information for anyone from the firm who logs in remotely from their home office or when working from anywhere (WFA).

How Does a VPN Protect Your Data?

Anyone familiar with how a computer firewall works will understand how a VPN shields the data accessed through the network. Theoretically, a VPN is simply a Wide Area Network (WAN), except that it extends beyond the building. 

VPNs maintain the same appearance, functionality, and security of a WAN on a private grid system while safeguarding sensitive data linked to remote data centers.

That is why they are widely used in businesses offering remote and hybrid work models or using cloud storage services versus on-prem servers.    

If someone were to obtain transmitted data sets, they wouldn’t be able to get through the encryption account. VPNs allow users to not only mask their location but also make it look like users are connected from anywhere in the world. It does this by replacing the actual IP address. Besides the sensitive data that accounting firms manage for their clients and the firm itself, a VPN also protects:

  • Web sessions
  • Passwords  
  • Browsing history
  • Financial transactions
  • Personal employee data entered into company devices 
  • Bookkeeping records
  • Archived data files
  • Streaming location

IT security experts recommend that users requiring data protection not use public Wi-Fi networks and hot spots without a VPN. Truly, anyone who enters any type of sensitive information over an open network should use a VPN.

Along with keeping hackers out, VPNs also keep internet service providers from selling online behavioral data to advertisers. It protects users from security vulnerabilities, like identity theft threats and third-party tracking.

How to Install a VPN Using Windows

Before installing a VPN, you need to create a VPN profile on your PC. The steps vary depending on if this profile is for personal use or your company. If you’re making a profile for work, look for VPN settings or a VPN app on your company’s intranet site, or contact your company’s support person.

Thankfully, Microsoft offers a step-by-step guide to help you set up a VPN profile and connection. You can access the directory by clicking here. By following the steps carefully, you should be up and running in no time. Anyone having trouble should contact an IT professional who specializes in working with accounting firms.

Hardware Vs. Software VPN

When choosing a VPN that will work best for their accounting firms, CPAs should consider hardware VPN versus software VPN.

Hardware VPNs contain a dedicated processor that gives users a physical device to connect remotely. Software VPNs are cloud-based services installed directly onto the user’s device. They tend to be more cost-effective and easier to maintain. You can read more about the top 10 third-party VPNs on the market by clicking here.

Regardless of whether firms use hardware VPNs or software VPNs, there are two types of VPNs:

  • IP Security (IPSec): This type protects internet communications. It is in charge of data integrity checks, encryption, and channel security.
  • Layer 2 Tunneling Protocol (L2TP): The second type cannot encrypt, so it creates a tunnel and encodes the entire data packet moving throughout the tunnel.  

When these two protocols pool together, their characteristics create an extremely secure VPN connection. It ensures the data reaches its target and does so without becoming compromised.

Tech Guru Can Get Your Firm Set Up with the Right VPN Services

VPNs also create a secure connection that provides even greater privacy than the most secure Wi-Fi hotspot. Consumer-grade VPNs are ideal for small to medium-sized accounting firms that need to keep data files and client information safe and secure. At Tech Guru, we can help you make your private connections more secure. Take the Tech Guru Security Self-Assessment and ensure that your accounting firm is doing its part to protect its data and avoid cybersecurity attacks.