Prepare Your Business for the Unexpected

Jan Sheridan, Vice President—Treasury Management

June 26, 2013

Articles

Recent events have reminded us that disasters and service disruptions can occur anywhere, anytime. It could be a local incident such as a power outage or fire; regional incident like a tornado or blizzard; or even a national incident like a pandemic illness. Regardless of the cause, it is vital for organizations to take the time to develop and maintain a Business Continuity Plan (BCP) to keep your business in operation during an unexpected event.

In plain language, a Business Continuity Plan outlines procedures based on the resources you will have available in the event of a service disruption or disaster.  It is a task that requires the dedication of time and resources to plan, prepare options, and train.  In addition to your daily operations, you will also want to think through other important business functions, such as your finances.  Would your organization be able to complete day-to-day banking functions if key members of your staff were out for an extended period?  Here are some key items to consider in your BCP as they relate to your banking:

  • Checking accounts:  Do you have an adequate number of authorized signers in the event someone is out of town or isolated due to weather or illness?  Do those people have access to secured check stock, Line of Credit, or even a supply of currency if needed?
  • Business Banking Online:  If key staff members are out, who can access Business Banking Online (BBO) to complete Account Reconciliation, Positive Pay, Transfers or Stop Payments?  Do your employees have the proper access and limits?  What is your internal procedure for requesting changes to BBO from the bank?
  • Electronic Transactions (ACH): Who has the ability to initiate ACH transactions such as direct deposit of payroll or consolidation of cash through Web Cash Manager?  Do you have back up users in place with proper limits and authorities?
  • Wires:  In the event of a disaster or pandemic, who has the ability to initiate Wire Transfers?  Are their limits adequate and do they have access to required passwords and PINs?
  • Procedures:  Are your day-to-day procedures documented, tested, and stored in a location that can be easily accessed by those who will need them?  When were they last updated?  Do you have a hard copy in the event of a power outage?

This list is not exhaustive, but should get you thinking about procedures to get in place now, before an interruption in service occurs.  There are a number of other considerations that may apply to your organization:  roles and responsibilities, identification of top risks, mitigating strategies, considerations for resource reallocations, etc.  The most important thing you can do is brainstorm “what if” scenarios with your staff and develop a plan to work through those scenarios.  Your banker is also an excellent resource to include in the planning process.

Your BCP is one of the most important resources to the life of your organization.  It is what you will turn to in the event of a disaster or other serious incident.  Hopefully, you will never have to use it, but if you do, it can be vital in preventing significant losses to your organization, as well as reducing the risk of legal liability.  It is absolutely critical that it is of sufficient quality to guide you through the crisis.

For more information regarding a BCP, visit: http://www.ready.gov/business/plan/

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This blog article is for informational purposes only, and is not an advertisement for a product or service. The accuracy and completeness is not guaranteed and does not constitute legal or tax advice. Please consult with your own tax, legal, and financial advisors.