Would you be able to keep your financial life in order in the event of an emergency? Hurricane Sandy and other recent disasters underscore the importance of planning ahead. The Pennsylvania Institute of Certified Public Accountants (PICPA) offers these tips to help ensure you have your bases covered in case a crisis occurs.
Have Important Documents Ready
Which insurance policies will you need if you suffer damage to your home, business, or automobile, or if you or a loved one are injured? Locate these policies and keep them in a safe place. A safe deposit box would work, or you could send copies of your documents to a family member or trusted friend who lives in another location and is unlikely to experience the same natural disasters that you might. If your documents are in electronic form, consider backing them up, and any other important information, to a “cloud” storage option, which will keep everything safe and easily accessible. Cloud storage—essentially large disk drives at an offsite location accessed through a secure online system—is an increasingly popular way, especially for businesses, to back up mission-critical information so it is accessible even amid disasters.
What other documents will you need? If your residence or business is damaged, an inventory of your home or office contents can help with the insurance claims process, especially for valuable items. Keep a list of key phone numbers on hand as well, like emergency services, insurance agent, and close friends and family.
Keep Cash on Hand and Gas Up the Car
If there are power outages, stores might not be able to take credit or debit cards. Having cash will enable you to make any necessary purchases if that’s the case. In addition, power losses can prevent gas stations from opening, which can lead to lengthy gas lines or long trips to find an operating station. Stores will quickly sell out of bread, milk, canned soups and foods, and other basic items, so if you have forewarning about a disaster, don’t be caught short on the necessities.
Be Prepared to Communicate
If your family is spread across a wide range of locations, develop a communications plan in advance to share information on everyone’s status. A phone tree is one option, in which one person serves as the main contact and he or she passes on details to several people, who then each pass on details to several others. Those with online access can also communicate through social media networks. Choose a solution that best suits your family’s needs, then consider a backup plan in case the Internet or phone access are unavailable in the immediate aftermath of a disaster.
Plan to Keep Your Business Running
A communication plan is also important for businesses. Depending on the level of disruption, businesses might need to communicate with employees, vendors, investors, or other stakeholders. The communications plan should be part of an overall business continuity plan, a much broader strategy to ensure the company can be up and running as quickly as possible. A business continuity plan should address all contingencies and include options for operating out of a different location if necessary. It should also anticipate how the business would remain functional with limited personnel if staff is unable to get to work or if inventory, supplies, or other necessities are delayed or unavailable.
Consult Your CPA
Planning ahead can mitigate many difficulties associated with disasters. If you’d like more information on how to prepare, turn to your local CPA. He or she can provide answers to all your financial questions. To find a CPA in Pennsylvania by location or area of expertise, or for more financial literacy resources, visit PICPA's consumer section.