Be Ready for Disaster with Business Continuity Planning

Your business is in danger. The threat is under your floor, over your roof -- maybe even within the very walls around you. What is it? Well, it could be many things: fire, flood, an earthquake, a prolonged power outage or even a bomb. Disaster can strike at any moment, and being prepared is essential to your business’s survival.

Business continuity planning (BCP) is the latest term for disaster planning -- a critical business task that is often overlooked or wished away. Contact Feeley & Driscoll by email or call us at 1 (888) 875-9770 to look at the basics of this concept and how to get started on your continuity plan.

BCP Protects More

Disaster recovery planning -- the concept from which BCP was created -- has existed for many years. It focuses on the nuts and bolts of getting through a disaster, including backing up computer data, maintaining the safety of important paper documents and storing spare equipment at many locations.

But assessing and repairing physical damage is only the first step in a long process. Relocating offices (or even workers within an office), regenerating lost data and recouping lost profits calls for careful planning. Time and information lost could go on to damage your market share, reputation and -- ultimately -- your profitability.

Your forensic accounting firm seeks to prepare not only the physical aspects of your business for disaster but also the intellectual aspects. After all, business processes, networks and affiliations need just as much protection as a computer or bank statement.

Your Business, Your BCP

Managing risk regularly with a forensic specialist implemented BCP is easier and less costly than trying to recover from a sudden, unplanned-for disaster. A good continuity plan protects the essential elements of your business from disaster and maintains an acceptable operations level while you recover. Design your plan with a three-step process:

1.  Identify your risks. The most common failure of BCP is fear: being afraid to ask the really tough questions regarding your business. Don’t hesitate to imagine a worst case scenario -- no matter how bizarre or unlikely it may sound -- and then consider what you could do to manage that risk. Neglecting important points is easy because of the many variables and degree of objectivity involved.  The most critical question to ask is: “If disaster strikes, how will this business process or piece of equipment work?” BCP usually works best when championed by business owners and top management, so get involved with your plan on the ground floor and convey its importance to your employees.

 

2.  Build your plan. Successful BCP covers everything and anything. With the risks you’ve identified in step one:

• Analyze the impact of as many potential disasters as you can, defining the financial, business and operational processes that could be affected by each,
• Assess your physical assets -- include buildings and equipment -- and consider how these elements fit into your business processes and the consequences of losing any or all of them,
• Strategize how to adjust your company’s resources and physical assets to compensate for a disastrous loss,
• Rank the importance of different business elements (such as equipment, departments, processes) and prioritize what to do if the worst occurs,
• Develop an integrated, accessible plan for any kind of disaster or business interruption (especially issues you identified in your risk assessment),
• Train your managers and employees to effectively test, update and use the plan, and
• Test the plan regularly, staging real-time simulations to sharpen your employees’ awareness of their BCP responsibilities and correct any shortcomings.

3.  Maintain your plan and maximize your insurance. Your plan must be a “living” document, capable of being consistently updated. If yours is a large company, consider hiring a full-time forensic specialist. For a smaller company, update the plan annually, more if you’re growing rapidly. And, while you cannot depend on insurance to fully protect you from disaster, don’t neglect it either. Insurance is an important part of a disaster plan. If your deductibles seem too high, contact your insurer (or others)to negotiate lower ones. After all, a deductible is an affordable amount that does not put your company at financial risk.

Expect the Best, Plan for the Worst

Accidents may come and go, but disasters can last forever.  For assistance with your BCP or advice on undertaking the implementation process, please contact us and ask for our forensic accounting specialists. We’d be happy to help you protect your business from disaster. Avoiding BCP Mistakes

Planning for disaster is easier said than done. You may easily overlook something or assume that you’re ready but find out the hard way that you’re not. Here are some points to consider when creating your BCP:

• Assess your business processes over time, not in one day,
• Back up computer data regularly and store hardcopies of computerized and noncomputerized data off-site,
• Test your ability to recover and use lost computer data (compare recovered data with normal backups),
• Document your continuity plan and keep it accessible to everyone in your organization -- not just high-level management, and
• Ensure your current business processes can handle the increasing need for data processing and growing amount of data.

Contact our forensic accounting services by email or call us at 1 (888) 875-9770 to look at some ways you can tighten your internal controls to prevent fraud.

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