Are you an accountant or CPA firm that needs to implement better Disaster preparedness and recovery planning? If so, the Krantz Secure team has compiled some information on how to develop a disaster recovery plan for accounting firms you may want to review (and then give us a call).

First, to design a disaster plan, you need a team. Creating the plan should not be left up to any one member of the administrative or technology staffs. The project requires a team leader (which we can act as), representatives from each department, a list of individual responsibilities, and a fixed due date. Your team should meet regularly during the plan development process and then present the final plan to management.

Second, understand the risks. A properly-written Disaster Recovery plan will help your organization recover from any potential disasters, so it is very important that the disaster plan focus on specific issues and contingencies that may become reality.

For example, it does little good for a company located in Florida to plan for the impact of a blizzard. The team should determine all realistic possible dangers and rate their potential impact on the company or firm, e.g. plan on hurricanes and floods instead.

A New York accounting firm can bet on nearly all disasters equally, unfortunately.

Next, develop the plan. In the event of an emergency or disaster, an effective recovery plan documents what will be done, by whom, and in what order.  The plan should clearly define who oversees your accounting firm’s disaster recovery before the disaster strikes.

Your disaster recovery plan should include all documentation needed by the disaster team in the event of an emergency. The plan and related documentation must be maintained at an off-site location.

For example, the first priority after a disaster should be to locate all firm/company employees. Depending on the size of your organization, this would be done by a single person or by a call team. Following an emergency, the call team must have access to telephones, and a current list of all employees and their contact information.

Then, test out your plan. A well-designed accounting firm’s disaster recovery plan is just that, a plan. Testing the plan will help you learn if it is complete and effective, and will give you the chance to improve the plan in a pre-crisis timeframe.

Next, you will want to perform risk mitigation. Although a tested, informative, and practical plan helps a company recover in the event of a disaster, there are several actions an accounting firm can take to avoid a disaster:

• Keep off-site documents up-to-date.
• Invest in quality computers and technology professionals.
• Diligently defend the security of your network.
• Back up every file, daily.
• Write and maintain a workable disaster recovery plan.
• Train your employees in disaster avoidance.
• Test your disaster recovery plan.

In the ideal world, disaster recovery plans for accountants would be unnecessary. However, the events of the past few years have taught us the importance of being well prepared for the potential impact of a disaster. No one knows when disaster will strike. Our best, and sometimes only defense, is to be well-prepared.

Creating a Hierarchy of Preparedness

HR departments, firm administrators, or firm designees need to work with facilities management, management information systems, customer relations and top management to cross-train employees to cover for each other in case of personnel losses. HR also needs to develop backup procedures for personal data.

Most importantly, HR needs to identify what human resources are critical to the firm’s survival. It is easier to replace a computer or an office than to replace a key employee. Developing procedures manuals and cross-training can help re-create human capital in times of crisis.

State-of-the-art management practices such as flexibility with respect to job assignments, cross-functional training, broad, competency-based job descriptions and employee empowerment, are consistent with disaster recovery planning best practices.

The best armies are those in which soldiers are well-trained, empowered, flexible and used to taking initiatives; likewise, accounting firms that have created flexible workforces in which employees can cover for each other are best able to adapt to adverse circumstances, including disasters.

Accounting firms who want to implement the best disaster recovery systems should utilize cloud- or Internet-based backup and use a third-party server for large data requirements. But it is important to remember that if your power goes out it may not be possible to access or recover Internet-based or third-party data. If your firm uses a great deal of bandwidth, recovery may be difficult. Ranking which data are most important might be a useful step. The Continuity Council recommends that you understand your recovery time objective (maximum allowable time) and your recovery point objective (maximum allowable data and personnel loss) in analyzing data recovery.

ContingencyPlanningGuide.com adds that CPAs should have up-to-date and clear evacuation plans. Your plan should be simple enough to understand, but robust enough to anticipate complex variations, to include employee panic, shifting building infrastructure and blocked exits.

You need to know you have an IT partner – and disaster avoidance mentor in NYC standing by. Accounting firms that need disaster recovery and business continuity services can call on IT service providers who can verify that those outsourcing firms have robust contingency plans in place.

Good news: Krantz does!

Know Your Disaster Planning Contingencies

Your contingency plan should be a living document; employees should be involved in developing it, and HR should support it with cross training. Management should also identify how to overcome interruptions in the supply chain, identify employees with medical conditions and mandate disaster training and simulation practice of the plan.

One step that might be beneficial is to meet with emergency personnel in your locality, to include fire, police and elected government officials.

You can get away with having just one disaster recovery plan for accounting firms of 100 employees or fewer, but as firms become larger and have multiple locations, then they will need to develop and practice multiple DR plans.

It is important to test your contingency plans. We recommend a range of exercises such as a checklist test, a table-top run-through whereby you go through a disaster scenario and then describe a step-by-step process, a structured walk-through and a full simulation in which employees not only practice evacuation, phone-tree calling and recovery of data, but also work at an alternative site.

And, most importantly, don’t panic or sweat the small stuff – the Krantz team of security and disaster preparedness experts are only one phone call away.

We Take Good Care of Accounting Firms

For more information on how to develop a disaster recovery plan for accounting firms and for IT services accounting firms in New York City can trust, call a Krantz associate at (212) 286-0325 or email us at [email protected]