Tennessee may have been spared from the hurricanes that have hit nearby states over the last several months, but even small business owners in Nashville should take time to assess their own preparedness for natural disasters. If the city sees a calamity that’s anything like the floods of 2010, it is best to know how to mitigate and manage the disaster’s effects.
For small business owners, disaster preparedness includes ensuring your records will survive the event and understanding how your finances can recover after the fact—tasks for which your trusted CPA is qualified to help.
Document all transactions and operations
Properly documenting all transactions and operations is always a good business practice. However, keeping close track of your inventory, payroll, bookkeeping, equipment, supplies, and the like will also serve an essential purpose should disaster strike.
Fires, floods, tornadoes—any of these can bring a small business to its knees. To get it back up and running, you need to start by knowing what you had. This information will be essential as you file for disaster claims, tax breaks, and other paperwork that will help you restart your business.
Maintain a disaster-proof records system
Good records, of course, are only as good for as long as they can be accessed. Maintaining a disaster-proof records system will ensure that.
If your CPA has been advising you to transition to a cloud-based, paperless bookkeeping system, consider disaster mitigation one more reason why you should take this step. Storing records in the cloud decreases the risk of losing their counterparts on paper or hard drives to fire or flood.
As an added measure, you can also create paper and electronic files of all your records, and store these separately away from your place of business. This way, you can retrieve them even if your main facility is compromised.
Take advantage of disaster loans and tax breaks
As you prepare for disasters, the most important documents you could protect are your insurance paperwork. A property policy and business continuation coverage should help you with repairs and bills if the business is forced to shut down.
Should the need arise, remember that insurance may not be your only source of assistance.
Your CPA, who can help you manage payments from your insurance company, can also coach you through the various tax breaks, tax extensions, and assistance loans you might be qualified for.
Of course, record-keeping is also required of any paperwork related to disaster tax relief. Working with your CPA to track these can help you limit tax exposure and hold on to every cent of income you need as you rebuild your business.
Sources:
5 Business Tax Breaks for Disasters, SmallBizTrends.com
Preparing for a Disaster (Taxpayers and Businesses), IRS.gov
Tax Credits for Those Affected By Natural Disasters, TurboTax.com
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