Password Manager Software: What It Is and Why You Need It

Password managers are critical software for any organization. Without secure accounts and a way to share them, businesses open themselves up to myriad cybersecurity threats. They are also likely spending more on their software stack than they need to. 

Here’s how to get the most out of your password manager so you can reap all the benefits: enhanced security, better collaboration, and lower software expenses.

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What is password manager software?

Simply put, password manager software makes it easy for individuals and companies to follow the password management best practices they know they should, but would be way too difficult without help. 

For example, people know that they need strong, random, and unique passwords for each account. However, with the average employee accessing over 200 different accounts to do their job, it would be impossible to remember all of those passwords. 

So, most people don’t do that. They either reuse the same password, use simple passwords, or they write down all of their passwords in a notebook (or worse, a Google Sheet password list). 

Why do businesses use password manager software?

Businesses use password manager software for a variety of reasons. Here are three of the main ones:

1. Ensure cybersecurity best practices are being followed. 

2. Facilitate more collaboration.

3. Maintain SOC security compliance.

Ensure cybersecurity best practices are being followed

We’ll go through the password manager software best practices in detail below. However, as mentioned above, there are many cybersecurity best practices. Employees already know them, understand their importance, and want to follow them. 

However, it’s just not practical to do so without a password manager. If you’ve ever forgotten someone’s name, you understand this implicitly. If you can’t remember John’s name, how could you be expected to remember your HR software’s password when it is 16 random alphanumeric characters?

Setting up an employee’s password manager software allows them to use a strong, random, and unique password for each account. That way, if a breach were to happen the effects are minimal. 

Facilitate more collaboration

While cybersecurity is usually the reason businesses onboard password manager software, there are many added benefits. TeamPassword is the best password manager for teams. 

By allowing your employees to share accounts without passwords, everyone has access to the software they need to get the job done without creating security risks. By sharing accounts, you can reduce the number of licenses your business requires, which can fully offset the cost of the password manager software.

Maintain SOC security compliance

System and Organization Control (SOC) maintains several security designation types. SOC Type I/II compliance requires strong password management controls. 

If you aren’t using a password manager, whether your security audit uncovers this or not, then you are at risk of being liable for data theft occurrences if a compromised account leads to your customers’ data being stolen.  

6 password manager best practices

Password managers help businesses and individuals stay safe online. However, to help this software keep you secure, it’s important to follow certain best practices.

Here are some common password manager software best practices:

1. Use a complicated passphrase as your master password.

2. Enable multi-factor authentication (MFA).

3. Let the password manager software choose random, unique passwords for you.

4. Share accounts, not passwords.

5. Be skeptical online. 

6. Audit your password manager regularly.

1. Use a complicated passphrase as your master password

A master password is the single password you need to remember when utilizing password management software. It unlocks your account, which stores all of your other passwords. 

Since this password provides access to all of your accounts, it should be as strong as possible. One way to ramp up the strength of your master password without making it more difficult to remember is using a passphrase. A passphrase is a collection of three or four words that are combined to make a very long password.

2. Enable multi-factor authentication (MFA)

Whether the software you use offers multi-factor or two-factor authentication (MFA vs. 2FA), it’s important to activate this option. MFA provides a very strong second layer of security to your accounts. While it can seem like added friction in your day, you should always activate MFA/2FA when it is available!

3. Let the password manager software choose random, unique passwords for you

TeamPassword’s password generator will automatically generate strong, random passwords for you. By letting the password manager software generate passwords for you, you guarantee that every password is as strong as possible. It’s also easier and faster than thinking of a new password on your own.

4. Share accounts, not passwords

TeamPassword makes it easy to share your accounts without sharing passwords. This is the only safe and secure way to do so. You should never share passwords directly! This gives the person you’ve shared the password with unlimited access to your account so long as the password remains the same. 

If someone leaves the company or changes positions, they still have access. Worse still, if you reuse the password, they could gain access to other accounts which were meant to remain private. 

5. Be skeptical online 

Password manager software can help you stay safe online. However, the Internet is filled with scammers looking to gain access to your accounts. Phishing is perhaps the most common risk. That’s when scammers send emails that mimic legitimate ones in hopes you will enter login credentials on their spoofed homepage. 

If you thought you were safer when using a phone, think again. Smishing is the SMS version of phishing and is quickly becoming the single biggest vector for cyberthreats. 

Looking at the sender’s address, checking the URL (and not just the text shown on screen) before clicking on links, and confirming information over the phone (the actual phone number and not the one in the phishing message) are some basic email/SMS security best practices. 

Generally assuming everything is a scam is a great security posture when operating online. If something is unexpected, too good to be true, or feels off in any way, it probably is a scam. 

Maintaining this mindset is as important as any tool, including password manager software, in keeping you and your business safe.

6. Audit your password manager regularly

Even when using strong, random, and unique passwords, they can be compromised. If a company is hacked, your credentials might be released on the dark web. Thankfully, since you haven’t reused the information, the threat is isolated. In this case, you simply need to change one password and continue on with your work. 

That’s the first reason to audit your password manager account regularly. There are others, and most of them come down to HR issues. 

First, some employees might leave the company, by choice or otherwise. In this case, you should be removing their access to your password manager software immediately. However, lapses occur, especially when employees give notice and leave amicably. Auditing all credentials monthly allows you to catch anything that slips through the cracks. 

Similarly, employees change positions frequently and while companies are quick to give them access to the new accounts they need, they might not be as fast to limit access to ones they no longer require. These accounts could have private information, and it is a SOC principle to allow as limited a number of people access as possible. If there is a cost associated with the user, then it’s also good for the bottom line to revoke their access in a timely manner. 

Finally, in a similar thought to the bottom line, you can review who has (or hasn’t) accessed software recently. If you noticed no employees have accessed a subscription recently, it might be time to download all of your data and cancel the account. If only a few people are accessing the account, you might be able to downgrade to a lower subscription tier. 

Get the most out of your password manager software

Password management is a critical component of cybersecurity. Without password manager software, you are telling your employees to do something that the human brain just can’t handle—remember hundreds of random passwords. 

However, the right password manager does more than just store passwords. It enables teams to collaborate and can even save you money. 

TeamPassword is the best password manager software. Don’t believe us? Sign up for a 14-day free trial today and try for yourself.