Each week, you read more news about disasters, ranging from rains to drought, earthquakes to fire. Here are two questions you need to ask yourself. (1) Do you need to make sure your practice is prepared for potential disasters? Yes. (2) Do you as an accountant or bookkeeper have a role in your clients' disaster preparedness planning or in their disaster recovery? Yes.
Whether or not you want to be involved, you most likely will be involved during disaster recovery. At the very least, you will likely be called upon as your client navigates insurance claims or applies for financial assistance, You may also be called upon to assist with changing budgetary demands, inventory management, etc.
Advising your clients on disaster preparedness planning and disaster recovery planning will make your job easier if disaster strikes, provide a valuable service for your clients, and create an opportunity for additional revenue for you practice.
This article provides a general overview of preparedness planning and includes a list of extremely valuable resources that you can use to design a preparedness plan for your practice as well as assist your clients. In Part 2 of this article (next week), we will provide more information on creating a disaster recovery plan.
Emergency Preparation Planning Outline
The SBA provides a resource for small business emergency preparation planning, which is designed specifically to mitigate damage and risk during an emergency and speed recovery following an emergency. The SBA's guidance includes three steps to prepare for emergencies.
1. Assess risk. First, identify the type of disaster that may affect your business. Types of disasters may range from weather-related incidences such as hurricanes or flooding to disasters caused by people such as arson or cyber-attacks. In addition, consider industry-related emergencies such as supply chain disruptions. Ready.gov's risk assessment page provides information on conducting a business impact analysis, including a business impact analysis worksheet and a risk assessment tool.
2. Create a plan. Each business needs a plan designed specifically on the foundation of its own business operations and needs. In other words, a more general plan can be used as a starting point, but the plan needs to be specifically created for the specific business. As you create a plan, reviewing a variety of disaster preparedness checklists and disaster safety tips will contribute to the creation of a robust plan.
The plan should include two components of emergency management - preparing for the disaster and recovering from the disaster.
Disaster preparation: The disaster preparation plan should include specific actions that will reduce the risk of damage if a disaster happens. These action items should address staff, surroundings, space, systems, structure and service. These steps will include actions that should occur now and those that will occur when you are warned of a pending emergency event (e.g., hurricane).
- Actions to complete now. For example, for businesses in an earthquake zone, computers can be velcroed to the desktop and shelving units can be bracketed to the walls.
- Actions when warned of an event. For example, when warned of a potential hurricane, outside items at the office should be moved indoors.
Disaster Recovery: Even as a business is completing the defined action items to mitigate risk from damages, a disaster recovery plan should be created. This plan should create documented, prioritized checklists that describe how the action items that must occur following a disaster. Once completed, the plan should be easy to access, even if the entire physical business is destroyed.
3. Practice the plan. Creating a plan and then simply filing it will have limited effectiveness. Instead, scheduling and conducting periodic reviews and practice sessions will make sure the team is able to access the plan under stressful situations and follow through on the checklist steps.
Resources for Disaster Preparedness Planning
Ready.gov provides "Ready Business Toolkits" using the 3-step plan outlined above for specific types of disasters. These toolkits are pre-populated with specific action items to prepare for each type of disaster.
- Earthquake Ready Business Toolkit and Spanish Ready Business QuakeSmart Toolkit
- Hurricane Ready Business Toolkit and Spanish Hurricane Ready Business Toolkit
- Inland Flooding Ready Business Toolkit and Spanish Ready Business Inland Flooding Toolkit
- Power Outage Ready Business Toolkit and Spanish Ready Business Power Outages Toolkit
- Severe Wind Tornado Ready Business Toolkit and Spanish Ready Business Severe Wind Tornado Toolkit
In addition, Ready.gov has additional risk mitigation resources, categorized by natural hazards, human-caused intentional acts, and technological hazards.
Next Steps for You as an Accountant or Bookkeeper
1. Bookmark this article to refer to resources as you begin building your own disaster preparedness plan.
2. Create a due-by date for when your risk assessment will be completed and for when your plan will be completed.
3. Working back from the due-by date for your completed risk assessment plan, schedule times on your calendar to assess risk for your practice.
4. Working back from the due-by date for your completed disaster preparedness plan, schedule times on your calendar to assess create your plan.
5. Reflect on the process of creating your disaster preparedness plan and decide how you would like to work with your clients on disaster preparedness and recovery. Would you like to simply share resources? Would you like to work alongside them and offer preparedness planning as a service?