Finding the Way Back: Disaster Recovery Planning

By Marc Dovi, Paychex  – July 14, 2020
Finding the Way Back: Disaster Recovery Planning

As CPAs and their clients continue to navigate the business world created by the COVID-19 pandemic, they’re dealing with a constant flow of information from federal, state and local governments. Couple that with the actions clients will be required to take to reopen, and it has the potential to be overwhelming. Busi­nesses of all sizes will need direction from CPAs and other trusted advisors so they can focus on getting back to business and getting their employees back to work.

The Way Back

After a pandemic such as COVID-19 that resulted in mandated business closures, the first question companies start asking is “when,” but equally important will be “how” can they reopen their businesses. Here are some questions business owners need to be prepared to answer:

  • I will likely bring back some, but not all, of my workforce. What should I consider?
  • What date should employees be re­called or rehired?
  • What do I have to communicate to returning employees?
  • I am ready to bring employees back, but our workload and workflow will likely change. What should I consider if I change my employees’ duties to fit our new needs?

Looking Forward

The impact of this pandemic could not have been predicted, but if clients are asking how to be better prepared, now’s a good time to discuss documenting policies and developing a business continuity plan (BCP) to help offset any future disruptions. A BCP can help set a business on the right path to recovering from an unexpected interruption of normal operations.

The following actions should be considered in any disaster recovery:

  • Assess risk. Business continuity management often begins with risk identification and assessment. For instance, companies located away from earthquake zones or common hurricane paths might still have to deal with the power being out.
  • Develop internal and external communications plans. In the face of an infectious disease outbreak or weather-related disaster where a business might have been damaged, it’s important to think about employees and others, such as vendors. They, too, might have suffered damage to or loss of their property — homes, vehicles, etc.
  • Have data backup and accessibility. Companies must safeguard confidential information and develop procedures to quickly recover data if a natural disaster, such as a fire or hurricane, occurs or during an infectious disease outbreak. Access to data from alternative locations is crucial and can be accomplished by working through cloud-based applications.
  • Consider business process or unit relocation. Business relocation should be considered well in advance of any event necessitating a move. For example, a construction company working in a beach town may want to store equipment far enough inland to avoid damage to equipment caused by flooding.
  • Set up an employee action plan. Employees should be informed of their roles and given the opportunity to practice business continuity procedures. It is wise to document the intended methods of communication with workers in the event of an emergency — via text message, phone or email.
  • Review cash flow. Even if a business stays relatively intact, a drag in con­sumer spending after a disaster can affect cash flow. Employers must also review their obligations under federal, state and local laws related to paying workers during periods of shut down.
  • Update customers. To maintain customer relationships through a cri­sis, businesses should communicate with customers in a variety of ways — by updating website information, using social platforms, by email or by phone. Providing alternate methods of communication before a business inter­ruption encourages customers to reach a business in case of an emergency.

This article has been provided by Paychex. An NJCPA member benefit provider and national leader in payroll services, Paychex offers discounts on integrated payroll, retirement and HR services for small and midsize businesses. Visit paychex.com/coronavirus-resources and paychex.com/accounting-professionals/knowledge-center for updated daily news, state law summaries on compliance topics, upcoming webinars and eventually a COVID-19 special edition of the 2020 U.S. Master Tax Guide that will help in consultations with clients later this year. Learn about Paychex discounts for NJCPA members at njcpa.org/benefits.


Marc Dovi

Marc Dovi is the marketing content program manager at Paychex.

This article appeared in the July/August 2020 issue of New Jersey CPA magazine. Read the full issue.