What would be the impact of?
... being flooded out of your office during tax season?
.... a blizzard that shut down your area for several days?
.... a fire in your office building? (water and smoke tend to travel fast)
.... an ice storm that cuts power for four days?
....
Professional firms are subject to the same risks as other businesses.
Fire, flood, lightning strikes, power outages, tornadoes and hurricanes, the whole range.
What would happen if you lost access to your office for a few days, a week or more?
What if everyone had to work remote for an extended period of time?
What would happen if your Internet was out for an extended period of time?
What if another company in your office building did something to compromise the entire building?
What if a fire turned your paper records into a wet smoky blob?
What if a water pipe broke in the sprinkler system?
Anticipate and prepare!
What could go wrong?
Fire, flood, tornado, hurricane, water leaks, vehicle accidents **, earthquakes, forest fires, power surges, etc.
In our area there is a significant probability of tornados, a near 0 probability of hurricane damage, a tiny probability of an earthquake, and depending on the location a significant probability of flooding.
If you are in an office building or retail strip you need to worry about problems caused by neighbors.
Make a list of possible disasters, assign a probability to each, and think through your reaction (more on that later).
** Our city has regular episodes of vehicles driving into building lobbies or store fronts.
Stages of Risk Management
1. Anticipation of Risk Events
2. Potential Impacts of Risk Events
3. Probability of Risk Events
4. Develop and Implement Action Plan
5. Monitor Environment
6. Transfer (often with insurance)
I have an obsession with risk management, and that includes disaster preparedness.
This year has been a nasty season of fires and floods and tornados and the year is not over.
In my experience disaster preparedness is a low priority for many businesses and professional practices, until the water is seeping under the door or the flames are licking at the office building.
So I am going to do a series on risk management, some repeats, to help small businesses and professional practices prepare for disasters.
You may never experience a disaster, but when you do it will be miserable at best.
One more time.....
Bookkeeping, sure it is boring. And repetitive.
AND CRITICAL........
to accurate financial statements
to accurate tax returns (required by law)
to accurate analytics
to accurate billing
to lenders
etc.
Business returns depend on a clean trial balance, in order to produce a clean income calculation and a clean balance sheet. Business returns can be easy for tax professionals or can be a nightmare.
The owner of the business determines which it will be.
About bookkeeping, which is usually a boring topic - but a critical topic.
The IRS requires accurate bookkeeping and accurate filings, and your tax professional should do likewise.
Not every bookkeeping and record keeping scheme is perfect, but you should strive for close.
Also, accurate and useful analytics are only possible when the bookkeeping and accounting system is accurate.
Don't think much about analytics? You should be.
Presenting your tax professional with clean accu.rate accounting records will save you money, save you grief, and has the potential to improve your managment
