Top three ways to protect cash flow with a business continuity plan

September 6, 2017
Kerrie Duvernay
Kerrie Duvernay
Here in the Gulf South we don’t need to be reminded how much havoc a disaster can wreak on a company and its cash flow. Many business people who have lived through recent hurricanes have fresh memories and first-hand experience.
Furthermore, weather isn’t the only threat to business continuity these days. Computer viruses, terrorism, system failures or labor strikes could impact just about any U.S. business community at any time.

So, how do you protect your organization's cash flow against threats such as these? The key to survival could very well be the resiliency of your treasury function. As a result, it’s vitally important that your organization develop a detailed business continuity plan that ensures uninterrupted cash flow.

Internal Planning Basics

Step 1
Step one in developing a business continuity plan is to fully understand all of your business processes and their exposures. This requires a detailed review of operations and documenting all cash flow-related processes and how different disasters could impact them. 

Step 2
Another step is to define all mission critical treasury activities — those that you could not live without for several days — and determine how you could work around them if they were interrupted. You want to be able to answer questions such as: in the event of a disaster, how will you fund payroll and time-sensitive trade payment disbursements?
"Draw up a list of possible disasters and determine which ones are most likely to impact your organization," suggests Paul Clement, our Director of Corporate Security and Contingency Planning. "Then tailor a business continuity plan for those events. For instance, is this a regional event, like a hurricane, that keeps me out of the city or an incident that strictly impacts my building? Is it a personnel issue, like a freeze that keeps people off the streets, or is it a cyber threat or IT issue? Your continuity plan should encompass people, infrastructure (hardware, facilities, software), and the reference materials that support each response, including call lists and instructions." 

Top three ways to protect cash flow with a business continuity plan
Test the plan at least annually. In addition, whenever your organization experiences significant change — such as new technology, a new business line or an acquisition — update the plan to reflect that change.

To help further develop your business continuity plan, check out the resources available from the Small Business Administration.
Maintaining Uninterrupted Cash Flow
Which brings us back to cash flow -- you need to continue executing mission-critical tasks even when you can’t get to the office. For Step 3, you need to incorporate all your tools and resources to ensure uninterrupted cash flow.  Online and mobile banking applications will enable you to review information, initiate and approve transactions, pay and receive bills and manage accounts anywhere you have Internet access.

With remote deposit capture your business can continue to deposit checks even when physically transporting them to a bank branch would be problematic. Larger businesses can use a desktop device — at the office or at a remote recovery site — to scan checks and transmit those images to the bank for deposit. Many apps for small businesses offer mobile check deposit; you simply take a photo of the front and back of the check with your smartphone.
Postal Service delays in the aftermath of a disaster can be a major payables headache. Using electronic transaction initiation services like ACH origination and wire transfers allows you to deliver critical trade, tax and other payments without concern for such delays. Same Day ACH can help when you need more flexibility in timing payroll, fast payout of insurance claims and reimbursements, or want to offer a same day bill payment option to your customers. This fall, Same Day ACH will be available for debit entries, enabling the same-day processing of virtually any ACH payment. 

By electronically depositing pay into employee accounts – either using direct deposit or payroll cards – you can avoid disaster-related delays that can occur when payroll distribution is paper based.

You can also rely on the convenience, flexibility and security of a Business, Purchasing or Virtual Credit Card to help manage company expenses before, during and after a disaster. In addition to being widely accepted, cards also typically offer travel and emergency assistance along with other important benefits. When paired with online and mobile card management programs, you can easily adjust parameters such as spending limits in real time to quickly adapt card features in response to an event.

Plan Ahead for Continued Access
Don’t wait for a disaster to strike to become disaster ready. Planning and preparation can take time, but you don’t have to go it alone. Our Treasury Services specialists can assist with a wide variety of cash management solutions, including helping you prepare for whatever challenges or opportunities your business may face.