6 Steps to Using a Password Manager for Your Small Business

May 22, 2025 · 5 min read

Table of Contents

• 1. Define User Access Needs: The First Step in Setting Up Your Password Manager
• 2. Create Role-Based Groups in Your Password Manager
• 3. Integrate Password Manager Access into Your Hiring Procedures
• 4. Secure Your Business: Update Termination Procedures in Your Password Manager
• 5. Don’t Overlook Consultants and Vendors in Your Password Manager Setup
• 6. Regularly Audit Password Access Within Your Manager

1. Define User Access Needs: The First Step in Setting Up Your Password Manager

Before you even configure your chosen password manager, you need a clear picture of who needs access to what. Your employees will require access to specific accounts, and often, external vendors or consultants will too. For instance, does your bookkeeper need credentials for your credit card portal? Does your marketing consultant require access to your company’s Twitter account? Compile a comprehensive list of every individual who will need password access. This initial inventory is foundational for setting up your password manager correctly.

2. Create Role-Based Groups in Your Password Manager

Once you’ve identified everyone needing access, the next step in how to use a password manager for your small business effectively is to organize these individuals into distinct password access groups within the manager itself. For example, your technical team probably doesn’t need the login details for your accounting software, and your marketing team likely won’t require access to HR platforms. Here are some common groups we see small businesses implement when they set up a password manager:

• Employees
• Customers
• Vendors
• Contractors
• IT Support

3. Integrate Password Manager Access into Your Hiring Procedures

You likely already have procedures for new hires, such as collecting tax information and setting them up in payroll. We strongly suggest adding one more vital step: add the new employee to their designated password groups within your password management application. This ensures that new team members are never delayed or unable to perform their duties because they’re waiting for someone to share a necessary password.

4. Secure Your Business: Update Termination Procedures in Your Password Manager

While no one enjoys planning for an employee’s departure, it’s a realistic and essential aspect of business operations. Preparing for when someone leaves (whether voluntarily or not) is vital for security. You absolutely do not want a disgruntled former employee to retain access to your bank accounts, social media profiles, or other sensitive company information.

To minimize risk, even if an employee leaves on good terms, you must promptly remove them from your password manager (e.g., their TeamPassword account). Poor personal password habits of an ex-employee could inadvertently jeopardize your company’s security.

5. Don’t Overlook Consultants and Vendors in Your Password Manager Setup

Your guide to using a password manager for small business wouldn’t be complete without addressing third-party access. When you engage with external consultants or vendors, ensure they are added to specifically designated, limited-access groups within your password manager.

6. Regularly Audit Password Access Within Your Manager

Regularly review your password groups for security. Ensure that all users in your password manager are current employees or active vendors. Check group assignments for each user to ensure that they have the appropriate access to the correct systems.