Know What To Do If Disaster Hits Your Business
January 25, 2019
Business owners and managers – especially those with responsibility for employee records – should have a recovery plan to implement, just in case disaster strikes.
When you consider disaster preparedness, hurricanes, tornadoes and floods come to mind. But other emergencies are more commonplace; vandalism, broken water pipes, fire, theft and other emergencies pose a threat to your records, inventory, equipment and facility.
After an incident, your business will need to reconstruct valuable records. As a business owner, you’ll need that essential information for payroll and tax purposes and will need records to prove losses, get federal assistance or insurance reimbursement.
Business owners are likely most concerned with protecting and securing employee data. Here are some basics to cover ahead of any incident:
Backup software/servicesTax and payroll professionals should routinely back up critical files. That means storing a copy in the cloud, or on an external hard drive. We recommend encrypting backup files as an added layer of safety.
Drive encryptionDrive encryption software transforms data into unreadable files for any unauthorized user who may access the computer. This software can also encrypt removable media, such as flash drives. Security Summit partners suggest drive encryption for any professional who handles sensitive employee or client data. Data security planThe Federal Trade Commission requires tax preparers to have a security plan – see the Safeguards Rule. But, it’s a good idea for any business. Some resources to get started:• Publication 4557, Safeguarding Taxpayer Data• Small Business Information Security: The Fundamentals by the National Institute of Standards and Technology• Publication 5293, Data Security Resource Guide for Tax Professionals
Here are tips for businesses that need to reconstruct their records:• Lost inventory – Business owners can get copies of invoices from suppliers. Whenever possible, the invoices should date back at least one calendar year.• Income data – Obtain copies of last year’s federal, state and local tax returns. Get sales tax reports, payroll tax returns and business licenses from the city or county. These will reflect gross sales for a given period.• Photo evidence – Ideally, a business owner or manager would have photos and videos to document the building, equipment and inventory. This can be easily stored in the cloud. But short of that documentation, many owners have candid photos or marketing videos, etc. that can offer proof.o If no photos are available, source the internet for depictions of the outside of the building, or make a quick sketch as a start.For more disaster recovery and planning information, visit these resources:
Business Preparedness page at Ready.gov IRS Disaster Assistance Hotline at 866-562-5227 / Monday - Friday from 7 a.m. to 10 p.m. local timePublication 2194, Disaster Resource Guide for Individuals and BusinessesFederal Emergency Management Agency Small Business AdministrationDisasterassistance.gov