To understand why you need a disaster recovery plan, you need only think about events that have occurred over the past couple of years in the United States. Recent flooding in Nebraska and Iowa, wildfires, and mudslides in California. Hurricanes in Texas, Florida, and North Carolina. Data breach after data breach. And many more localized catastrophes that might only affect your business.

Making a disaster recovery plan takes some time and effort, but not nearly as much as recovery would if you’re not prepared – if recovery is even possible. Here are eight of the things you should be doing.

Determine what your risk level is.

What kinds of risks is your business most vulnerable to? How likely is each to occur? You know what natural disasters are common in your geographical area, but what about a fire in your office? Burst pipes from a frigid cold? A burglary? Figure out the probability of each event and tailor your plans accordingly.

Evaluate your business insurance.

Do you have adequate coverage?  If the worst happens and you are under-insured, you can always apply for disaster loan assistance from the U.S. Small Business Administration (SBA).

Create a written inventory of your company’s major assets.

Ask employees to take photos of the equipment at their workstations, and ask someone to get pictures of shared valuable items. Document all of this in writing and store it offsite or in the cloud.

Identify key personnel roles.

Start by assigning a crisis manager. If you’re a sole proprietor or very small business, this may be you. But make sure there’s a digital central location devoted to disaster recovery documentation.

Establish an emergency communication plan.

Not just among employees, but with customers and vendors. How will you all communicate if standard communications systems are down? How will you let the outside world know what’s happening?

Know what your most critical software/website needs are, and prioritize them.

Which software applications are the most important to your ongoing operations? Are they accessible through the cloud? If so, are any or all of your employees able to work remotely? If not, how will you gain access to your local business solutions?

Always have comprehensive offsite digital storage, and make sure it’s secure.

This should be standard practice all the time, but it’s essential to beginning the recovery from a disaster. Any important documents that are on paper should be duplicated offsite, too.

Test your plan.

If you have a staff, schedule some dry runs so that everyone knows what should transpire. Organize a bag lunch or bring in pizza and go over your plans.

Your accounting data is some of the most sensitive information owned by your company. Customer records, accounts receivable and payable, payroll data – all must be absolutely safe and possible to recover quickly. We can help here. If you’re still doing manual accounting, we can help with getting your data into QuickBooks; it’ll be easier to secure. Contact us, and let’s have a conversation about your disaster recovery plan.

Large corporations grab the headlines when they’re hit by a cyber attack, but small businesses are far from immune. In fact, hackers count on the fact that organizations with just a handful of, or a few dozen, employees relax their security standards because they think their size puts them under the radar.

Establishing stringent security measures may seem too time-consuming and costly, but ask any business owner who’s suffered a data breach what that event cost them in hours and dollars. You’re likely to become more proactive in your approach to cyber-safety. Here are five things you can do.

Make employees an integral part of the process

Employees can be part of the problem when a data breach occurs (unwittingly or not), so make them part of the solution. Lead by example: Show them how committed you are to keeping your company’s data protected, and ask them to be equally involved. Provide the training they need and follow up on their follow-through.

Set up restrictions

Part of your—and your staff’s—commitment to cybersecurity necessarily requires boundaries. Determine what data and websites should be available on the network (and to whom).

Consider letting a trusted third-party processor handle payments

This can be a cheaper alternative to a merchant account, and it keeps customers’ credit card numbers off your network. But it has its downsides. Talk to us before deciding on a vendor.

Use the FINRA Checklist

The Financial Industry Regulatory Authority (FINRA) has developed a series of spreadsheets that you can use to gauge your company’s readiness. Maintaining these may be overkill for your small business, but at least look at them to see the actions and awareness they’re suggesting. You can view thumbnails on this page and/or download them.

Bring in an experienced Managed IT team

If you don’t have a full-time IT professional on your staff, it’s probably because your company’s technology configuration doesn’t warrant that constant level of expertise. Compensation and benefits for such an individual can run north of $100,000/year and may not fit in your budget.

Managed IT—the outsourcing of your information technology work—can be an effective compromise between struggling to stay safe and overloading your payroll. These expert teams are there when you need them, but you’re not paying for a full-time employee. Not only can they help you establish a safe cybersecurity profile and set of procedures, but they can also advise you on hardware and software purchases when your current systems aren’t meeting your needs – and help you install and maintain them.

Lutz offers a variety of services that can help prevent a data breach. We invite you to set up a consultation to see if we’re a match. Contact us, and we’ll help keep your company’s valuable information safe.

You can fix some of the problems your small business faces and move on. You change couriers or banks or suppliers if services and fees aren’t acceptable.

Cash flow is not one of these. It’s a constant battle, one that you will always have to be monitoring. Here are five steps you can take to make some headway.

Balance your receivables and payables

You value your customers—especially the long-term ones—but are you being too generous with them by having terms of 30 or 45 days while your suppliers expect payment in 15? Making those two sets of due dates match more closely should improve your bank account balances.

Of course, this will require some negotiating with your vendors and/or breaking some bad news to your customers. Consider offering your customers early payment discounts and applying finance charges to late remittances. Appeal to your long-time suppliers and see if you can stretch out those due dates.

Send and accept electronic payments

Pay your bills electronically wherever possible. This will allow you to pay right before the due date rather than sending a check 10 days ahead that may be cashed quickly. You might even consider paying with a business credit card that offers benefits you need, like cash back – as long as you always pay your bills in full.

Offer the same courtesy to your customers. Establish a merchant account so they can make bank or credit card payments. You are likely to get paid sooner.

Tighten up your inventory

Inventory levels that aren’t closely monitored and adjusted can be a drag on your cash flow. Stock too much of an item that’s not selling, and you have money tied up unnecessarily. Let yourself run short on popular items, and you’re losing sales. You need to have real-time inventory counts so you know ahead of time when to have a sale and when to order more items. This insight can also help you determine when it’s time to raise or lower prices.

Personalize your collection efforts

Email reminders are fine, but they’re rather impersonal and easily ignored. Customers who are seriously in arrears should get one or more of the following:

• Statement with a handwritten note on it
• Personal business letter sent via U.S. Mail
• Phone call

Cash flow forecast

You need to know where your money is all the time – and where it might be in six months or a year. For that reason, you need at least two standard financial reports: Statement of Cash Flows and Cash Flow Forecast. These are difficult-to-impossible to assemble manually—even in Excel. And they’re hard to interpret.

Software and Expert help         

If these actions sound too complex and time-consuming, you’re probably not using accounting software like QuickBooks, which can help you with all five steps. We can get you set up with it; we can also provide you with a cash flow analysis. Contact us, and we’ll help you make a plan for dealing with this perpetual problem.

When you started your business, you may have been able to get away with tracking your inventory on index cards and/or Excel. When you reach a certain point in your growth, though, you need better tools for this task. QuickBooks supplies them. The first step in this complex process is the creation of Item records.

To get started, click the Items & Services icon on the home page (or Lists | Item List). Click the arrow next to Item in the lower left, then New. If you buy and sell products, you’ll need to select Inventory Part under TYPE. There are other options you may use in some situations, like Service.

You’ll need to provide a lot of information in this window, and you may not always know what to enter. We recommend you consult with us if you are going to work with inventory management, since it can be complicated, and your records must be precise.

Some of the fields require only simple answers. You’ll enter an Item Name/Number and, optionally, a Manufacturer’s Part Number. You’ll write the brief descriptions that will appear on purchase and sales transactions. Since you both buy and sell products, you’ll be asked to provide your own cost for procuring them and the prices you charge customers. Two more easy questions: Do you have a Preferred Vendor? And will you charge sales tax?

Assigning Accounts

There are times when you will be asked to assign accounts to records and transactions in QuickBooks. This is one of them. Your overall bookkeeping and your reports depend on the accuracy of your choices.

Your COGS Account (Cost of Goods Sold) is the easiest to identify, since your Chart of Accounts has a matching account. But what Income Account should you select? Which Asset Account? These are the kinds of questions we can help you answer.

Getting Information

As you’re working with an item record, you’ll notice a section at the bottom labeled INVENTORY INFORMATION. You’ll  supply two numbers here. How many of these items do you currently have? And at what point do you want to reorder? QuickBooks calculates a third number for you: your Average Cost. We can explain why this is important to know.

Once you start buying and selling items, three of the numbers in the INVENTORY INFORMATION section will continue to change. Your quantity On Hand will reflect what you’re buying and selling in real time. QuickBooks will also track how many items have been promised on sales orders and ordered on purchase orders.

If you are conscientious about creating accurate, comprehensive item records and transactions, you’ll find that QuickBooks’ reports can help tremendously as you make purchasing and sales decisions. We can help ensure that you’re approaching this critical task with the thoroughness and precision it requires. Contact us, and we’ll set up a consultation.

If you use QuickBooks or you’re a power Excel user, you know you can create reports that provide tremendous insight into your company’s financial status. They can tell you what you own and what you owe down to the tiniest detail.

But capable as they are, these tools have limits. They can’t provide you with a number you may need for a variety of reasons: the economic value of your business. There are numerous business valuation methods professionals use to get there, and they’re all quite complex.

Why You May Need One

You may already have plans for 2019 that would require a business valuation. For example, you could be planning to sell your company, or buy another. You might be going in a new direction whose expenses will require financing. You may also simply want to know what your business is worth so you’ll have a baseline to consult when measuring future growth.

These are all common reasons for taking on this formidable project. There are many other situations where you’d need this information. For example:

• Succession planning. If you’re preparing to retire or move on to a different venture, you’ll need to know the value of your business so you can develop a strategy for any restructuring that may be necessary.
• Gift tax planning. Are you considering transferring a portion of your company’s value to a relative, a charity, or some other party? You’ll need to understand the tax implications.
• Disaster recovery. You can’t, of course, plan for a natural disaster. But if you’re affected by one, you’ll want to have a basis for comparison to know how much you lost.
• You know there are numerous ways to raise capital if you’re planning to expand, or if recent growth has made it necessary to acquire new property so you can better accommodate it. Any individual or other third party you approach will surely want a business valuation.
• Personal rancor. Whether it’s a divorce or a relationship-ending disagreement among partners, serious interpersonal clashes can mean someone who has a stake in the business wants out. To know how much their exit will cost, you need to know the value of the company as a whole, as well as what individual elements may be worth.

An Annual Event?

Some financial professionals recommend that you do a business valuation once a year. Why? Two simple reasons. One, you never know when you might need one. And two, you can’t determine your company’s worth by simply plugging numbers into a spreadsheet. It takes time to assemble both the financials required and additional variables, like location, industry, and market forces.

To get a business valuation that will be considered credible by the parties involved, you need a financial firm that has done them before and can apply its expertise to your unique situation. We can help you with a valuation analysis. Contact us to set up a meeting to discuss this important topic with our experts.