When catastrophe strikes, it is rare that you are given much warning. For accountants, bookkeepers and business owners, disasters can lead to interrupted business flow or, worse, losing records entirely. Are your business accounts ready to handle the unexpected?
Remember that disasters can happen to anyone of us
Disasters can take all shapes and forms and can happen to any size of business. Extreme weather and data-hacks are possibilities that could completely wipe out your business accounts. Less dramatic examples include file corruptions, theft of equipment, internet outages, employees suddenly quitting, or accidental damage to hardware.
Temporarily or permanently losing your accounts could mean you’re unable to access historical data or bill and process invoices. Any time you’re not open and ready for business could mean lost reputation, lost clients and ultimately, lost revenue.
Actionable steps to create an effective continuity plan
While focusing on financial planning for small businesses is a common strategy, not many plans include specific issues that may arise. An estimated 30% of businesses have no disaster recovery strategy, which exposes business and client reports to significant risk.
The field of ‘disaster-proofing’ your business is more commonly known as continuity planning, to allow for smooth-sailing, i.e. continuity, when the unexpected happens.
Whether you are an individual, a small, or a medium-sized business, follow these actionable steps below to create an effective disaster plan for your accounts:
Create a documented plan and test it
Having a pre-written continuity plan can be the difference between your business being out-of-action for just a few minutes, to hours or even days. Leaving everyone to ‘figure-it out’ when it happens may sound like an acceptable option, but could have lasting impacts on your overall bottom line.
Components of your accounts continuity plan should include:
- Details of who has responsibility for getting accounts back up and running
- Lists of your critical accounts
- Communication instructions for clients and employees
- An understanding of payroll, tax and invoice rules and deadlines
Write out your plan on paper and share it with your company. Most importantly, test it. While many good ideas work in theory, your disaster planning falls flat on its face if it doesn’t work when disaster strikes. Get all your employees together and make it fun testing different scenarios.
Take advantage of online functionality
Cloud accounting technologies, such as QuickBooks or FreeAgent, are great tools that can take some of the stress out of continuity planning. Digitising your accounts online mean that you can access them from anywhere, at any time. QuickBooks even has a variety of plugins available to make backing-up a breeze.
Know what to do when the internet dies
In 2016, a staggering $7bn was estimated to be lost in the UK economy due to broadband outages, so it’s important to be ready when the internet cuts out. Options could be to use software that has both online and offline versions, or having a quickly accessible alternative internet source.
Have a foolproof data backup process, and test it
Once set up, most of us assume that back-ups of our accounts are magically happening in the background while we get on with the work. However, it is very important to test that these backups are actually successful and contain all the information you need in case you need to start over.
The type of storage and protection for your backup may vary depending on the size of your business. Larger companies may wish to have something in-house, managed by an IT department. Smaller firms may wish to take advantage of various cloud backup services.
Use different locations to store your accounts
For your accounts, it can also be beneficial to have your backups in multiple places. Think about the different reasons why you may need a backup and how you will access it. What if you need to move location? One option is to download your accounts and move them to a hard drive, and then store them at a physical location away from your current office.
Check your insurance policy and create an inventory list
Your business will change over time and your insurance needs will too. Check to see if your insurance provider is giving you all the options you need, or if you are paying too much for options that are no longer necessary. Also check to see what your insurance provider might need if you had to file a claim. An example might be an up to date inventory list, so make sure you have this in place. Inventory lists are also useful for tax write-offs for losses that may arise from a disaster.
Looking to hone your skills on running tax records for your business? Check out our ultimate guide to UK accounting events and conferences in 2018.