If disaster strikes, is your business prepared? Most businesses have a business plan, but you may be surprised how many don’t have a business disaster plan – a set of guidelines to minimize the impact of a disaster, natural or otherwise.
Of course, the odds of a disaster striking your business are very small, but it’s a possibility nonetheless. That’s why it’s important to have a plan in place to help your business survive and recover should the unthinkable happen.
Below are 5 steps recommended by CRI’s CPAs to disaster-proof your business.
- Back-up your records—including bank statements and tax records.
Every business relies on documentation as a part of its day-to-day operation. So it only makes sense to make sure important documents and vital records are not only kept safe, but backed up in the event of loss. Fortunately, the digital age makes this process easier. Many businesses receive their bank statements and documents electronically. These can be backed up with a few simple clicks. Store these and all of your backed-up business records on CDs, flash drives, or external hard drives and keep them in a safe place.Tax records should be backed up too. Scan your W-2s, tax returns and other tax-related documents and convert them to an electronic format. And, of course, store these in a safe place.Where’s a “safe” place to store your duplicate files? Logic dictates that it’s not in or around your place of business. After all, having originals and duplicates in the same place doesn’t help if that place is damaged or destroyed.
- Document valuables and equipment.
Document everything and keep an accurate inventory of the physical assets of your operation. This step will make things a lot easier should you ever have to make casualty loss claims with your insurance company.
- Make a detailed, room-by-room list of your business equipment and other valuables. Be sure to include model and serial numbers, if applicable.
- It’s also a good idea to have a video or photographic record.
- Again, store these records in an off-site location – away from the geographic area at risk.
- Check on fiduciary bonds.
Ask your provider if a fiduciary bond is in place; this option can protect you in the event of default by your payroll service provider.
- Create a continuity plan.
- Plan in advance to manage any emergency.
- Assess how your company functions and determine which staff, procedures, and equipment you require to keep your business operating.
- Identify the operations critical to survival and recovery.
- Establish procedures for succession of management.
- Keep your emergency plan up-to-date.
Emergency planning is not a one-and-done situation. Your plan should be updated annually to reflect changes in business and personnel. Just as important is to hold employee meetings on a regular basis to review the emergency plan.Things to consider with your emergency plan:
- Know what kind of disasters are most likely in your area (such as floods, earthquakes, tornadoes, hurricanes) and develop your plan accordingly.
- Determine where to seek shelter in the event of an emergency.
- Develop a plan for communicating with employees, customers and others should phone and internet services be disrupted.
- Identify the safest evacuation route for employees and periodically conduct evacuation drills.
- Assemble a disaster supply kit that includes first aid supplies, a battery powered radio, a NOAA weather radio with an alert function, and a portable generator.
The IRS can help
If there is a disaster in your area and you are affected, the IRS can provide previously filed tax returns and all attachments, including Forms W-2.
Don’t Forget Your CPA at CRI!
Not sure what financial records you should backup in the event of a disaster? CRI’s business consultants can walk you through the whole process and help you prepare all of the necessary documents for safe storage. In the meantime, we hope the only emergency your business encounters is running out of coffee. And if that worst case occurs, still call CRI and we’ll take you for a cup or two.