Solomon & Hoover CPAs, PLLC Blog - Financial Guidance to Help Your Business Succeed

Solomon & Hoover CPAs, PLLC Blog

Financial Guidance to Help Your Business Succeed

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Companies without a disaster recovery or business continuity plan only need to consider the aftermath of last November’s Hurricane Sandy. Property damage and business interruption losses are estimated at more than $50 billion, and many businesses in the affected region are still struggling to clean up, rebuild and reopen.

Although most natural and manmade disasters are unavoidable, companies can take steps to protect employees, minimize loss of data and recover costs. A business continuity plan can reduce financial losses and facilitate a faster recovery, whether you experience a fire, earthquake, power outage or even a flu epidemic.

What’s in a plan?

The complexity of your plan will depend on the size, location and nature of your business, as well as the specific risks you face. For example, most small companies don’t need a sophisticated media relations plan, and companies located in plains states shouldn’t waste time planning for tropical storms. But every company should gather feedback from its department heads and come up with plans for the following:

People. Assign a point person (as well as backups) who’ll be responsible for ensuring all employees are safe and accounted for — whether they’re at work or home. This person should keep an up-to-date list of employees’ phone numbers, e-mail addresses and next-of-kin information. He or she might also be in charge of evacuating your office or facility. Be sure to designate an offsite place for employees to meet and provide a central contact number so staff members can check in.

Information technology. To help ensure your company stays open when servers and other physical equipment are damaged or destroyed, back up e-mail, data and software offsite or online. Online backup or cloud computing services are secure and affordable. Following a disaster, they enable you to restore data from a remote location. And with a Web-based e-mail system, you can continue to communicate with employees, customers and vendors during the recovery period.

Insurance. Review your company’s coverage. Does it provide enough to replace lost assets, restore operations or, if necessary, relocate? Remember to account for such intangible losses as destroyed intellectual property, nonexistent sales or undelivered products. And be sure to read the fine print. Coverage for damage caused by flooding following a hurricane, for example, may not be covered under a standard policy.

Have plan, will prosper

It’s not enough to create a disaster plan — you also need to review, revise and test it periodically. Hold regular fire and other evacuation drills and ask employees to update personal contact information. At least once a year, ensure that your IT backup systems are functioning properly and that your insurance coverage is keeping pace with the value of your business. By making business continuity an ongoing process, you and your employees will be ready to act should the worst happen.

© 2012 Michele M. Hoover, CPA. Alexander & Hoover, P.A., Certified Public Accountants, specializes in providing a wide range of diversified accounting, tax, finance, and consulting services to individuals and businesses. 

To learn more, contact Michele M. Hoover, CPA at 239.481.4114 or visit http://www.alexanderhoover.com

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