Article written by: Louise Matthews
Security has become an increasingly pressing issue, especially as companies become more digitalized and rely on technology for operations. Data from Statista reveals that in 2023, three in four US companies were at risk of a material cyberattack. Successful cybercrimes can cause significant financial and reputational damage to a business. Sensitive data is also one of the most prominent consequences, emphasizing the need for tighter security. While more companies are investing in cutting-edge cybersecurity measures, there are also other solutions that can streamline the process of enhancing security. An account hierarchy may seem simple, but the structure it offers can pave the way for fewer cyberattacks and the protection of sensitive information; here’s how:
What is account hierarchy?
An account hierarchy is a method of organizing accounts within a system to illustrate relationships between them. Softrax defines account hierarchy as a structure designed to facilitate financial reporting, analysis, and management. Account hierarchies depend on the organization’s needs, but they typically include a chart of accounts (COA) that lists all the accounts a company uses to record its financial transactions. Different account categories and sub-accounts can summarize data into more meaningful and detailed sections. But beyond managing finances, an account hierarchy can be used to delegate responsibilities, permissions, and access control policies, enhancing security.
Segregation of duties
An account hierarchy can provide a clear segregation of duties, a security principle used to help guard against fraud. Insights from Security Boulevard highlight that the core idea behind the segregation of duties is to distribute tasks and responsibilities among individuals in a way that establishes checks and balances. An organization’s cybersecurity department may have different permissions and access to information than the finance or sales departments. Duties can also be segregated within teams; for instance, server administration tasks can be separated from maintenance work, equipping different users with different permissions corresponding to their roles and needs. With these separations, it can become more difficult for a single user to commit fraud or breaches. Account hierarchies can help enforce the segregation of duties by offering greater transparency on authorizations and ensuring that users only have access to the permissions they need to perform their jobs.
Limiting authorizations
An account hierarchy can help your organization establish a clear structure and detailed relationships between accounts, including levels with varying responsibilities and authorizations that can dictate the information users in the account can access. Limiting access to sensitive data, critical systems, and functionality to authorized users only can help maintain tighter security and prevent important details from leaking. For instance, users in a certain account may have access to information like customer contact details but not financial data. Accounts with a higher level of authorization may have access to both and more. Security can be further enhanced by using V-Key multifactor authentication, ensuring only authorized users within certain accounts can access data and preventing vulnerabilities associated with traditional password login. This keeps sensitive data airtight so companies can worry less about security and focus on core business activities.
Simplifying permission management
With permissions and duties delegated in the account hierarchy, the structure can make it easier to enforce security and authorize the right people to access specific data. With an account hierarchy, companies can assign permissions to groups of users instead of individual users. As such, businesses can save time and effort, especially in large organizations. A more straightforward process can prevent individuals from gaining unauthorized access to information outside of their specific tasks and needs.
