Risks to companies today seem to be ever increasing and ever changing. Cyberattacks, natural disasters, and human error are just a few reasons why you need a business continuity plan. In the event of a business interruption, what will you need to maintain uninterrupted cash flow during the disaster?
The first step 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.
You also must 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. For instance, 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. Then tailor a business continuity plan for those events. It should encompass people, infrastructure (hardware, facilities and software), and the reference materials that support each response, including call lists and instructions.
Tools to bolster your plan
It’s wise to incorporate into the plan how you will use a variety of tools your bank can provide, such as:
▪ Online and mobile banking that lets you review information, initiate and approve transactions, pay and receive bills, and manage accounts anywhere you have internet access.
▪ Remote deposit, so you can deposit checks electronically when physically transporting them to a bank branch would be problematic.
▪ ACH origination and wire transfers These services allow you to deliver critical trade, tax and other payments electronically without worrying about mail delays.
▪ Same-day ACH can help when you need more flexibility in timing payroll or fast payout of insurance claims and reimbursements, or when you want to offer a same-day bill payment option to your customers.
▪ Direct deposit of payroll lets you electronically deposit pay into employee accounts and avoid disaster-related delays that can occur with paper checks.
▪ Same-day ACH can help when you need more flexibility in timing payroll or fast payout of insurance claims and reimbursements, or when you want to offer a same-day bill payment option to your customers.
▪ Direct deposit of payroll lets you electronically deposit pay into employee accounts and avoid disaster-related delays that can occur with paper checks.
▪ A business, purchasing or virtual credit card can help you manage company expenses before, during and after a disaster. In addition to being widely accepted, cards typically offer travel and emergency assistance along with other important benefits. When cards are 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.
Importance of preparation, testing
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, and help you prepare for whatever challenges or opportunities your business may face.
Finally, be sure to test your business continuity 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.
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