Preparing your disaster plan for the new and unexpected

Preparing your disaster plan for the new and unexpected

Even if your firm has a plan for a natural disaster, new threats emerge all the time. Most of them bring the unexpected, and all of them bring edginess and fear. How can you stay ready in such circumstances to fulfill accounting, tax, and financial obligations to your clients?

The most severe crises have the potential to disrupt business beyond just the scope of bad weather or power outages, but you can handle it if you rely on tested procedures for emergencies and nimbly watch for developments.

Use your experience

In an extreme emergency, the IRS and other tax authorities can change their operations fast, producing delays in processing and, frequently, postponements in filing. Slowdowns in processing – and state and federal refunds – might be a good subject to discuss with clients around the time of disasters and emergencies. Note that the IRS often does extend filing deadlines in declared federal disasters, but not routinely when states declare emergencies.

How do you assess whether a given emergency will put added strain on your staff and workload? It’s hard for you to know ahead of time. Your firm’s normal disaster plan may not cover a specific new problem, but that doesn’t necessarily mean you can’t handle the situation using experience.

If your practice is located in a place that has treacherous weather, you may already be more advanced in planning for this current crisis than you realize. Perhaps you, your firm, or a member of your staff went through a flood or fire in the past. Tax season also usually falls during flu season; absenteeism is a problem you’ve likely handled in the past.

Other common sense approaches

Obviously one part of your plan in a crisis involves being ready if tax authorities officially change processing procedures, which dovetails with what to tell clients regarding timeliness of refunds. Don’t rush to try to give clients clear answers too early, but you can let them know you understand their concerns and will pass along definite information when you get it. The crisis can also provide an opportunity to talk to clients about impacts on their own businesses and investments, a conversation that can deepen your client relationships.

Speaking of conversations, make sure your plan includes redundant communication channels and supervision. Everyone on your staff should know who to contact first in an emergency, and second in case the primary can’t be reached. Also designate primary and secondary contacts specifically for major IT issues.

Technology can help, of course: teleconferencing instead of face-to-face meetings, for instance – Zoom and join.me are two examples. Fewer in-person interviews might even speed up your workflow. If you’re like most firms, you’re familiar with such tech tools as laptops, smartphones, CRM software, and online portals to facilitate staffers’ mobility and clients’ workflow. Frequent email reminders and instructions can help clients become more comfortable with using your portal.

Electronic workflow can involve email alerts to clients, staff scheduling and monitoring of each work stage, shipment to the client for e-signature and electronic payment, and e-filing.

How to maintain your plan

Any crisis offers the chance to learn for future disruptions. Among the pointers:

  • Gather a sense of your firm’s IT requirements, such as backup speed and storage space. Don’t neglect anti-theft, antivirus, and other protections.
  • Designing a disaster plan requires a team, not just an individual. It needs a team leader, representatives from each department, a list of individuals’ responsibilities, and a fixed due date for completion and implementation.
  • Write down your plan, discuss and review it, and then test it with your entire firm. Evacuation plans, like fire drills, should account for immediate damages and dangers in your office and in the nearby area. Keep a written copy of the plan and all accompanying documentation (such as contact information for all staff) off site.
  • Discuss your plan with local emergency personnel.

You also need a disaster recovery plan for when the emergency passes. Start with a list of jobs in your firm that you would need to continue in another location, then whittle this down to only the most critical jobs to keep your business running. Do the same for necessary and basic office equipment such as a desk, chair, and computer.

Good disaster-recovery plans also incorporate cloud- and net-based production and backup systems – protection against devastation in one physical location. Note that a potential loss of electrical power might make recovering this information a temporary problem. It might be smart to prioritize the data and have plans that allow for retrieving the most important information fastest.