4 STEPS TO CREATING AN ACCOUNTS RECEIVABLE CONTINUITY PLAN

4 STEPS TO CREATING AN ACCOUNTS RECEIVABLE CONTINUITY PLAN

Most businesses have a continuity plan. It states what types of disasters could occur in your business that are, usually, beyond your control and how you can try to avoid them or diminish the damage caused by it. The point of a continuity plan is to make sure you spend as little time down as possible and to have set plans in place to get your business back and running as quickly as possible. As the saying goes, time is money, so every minute spent not working means your business will be bleeding cash.

Although most businesses already have a continuity plan in place for the company as a whole, it’s important that your accounts receivable department has its own continuity plan in place. If a disaster strikes like a fire, hurricane, tornado, rogue employee, malicious activity or anything else that can jeopardize your workflow, the accounts receivable department could have a chilling effect on the entire business as it bring in the cash that supports all other functions.

Here’s how you can get started on creating an accounts receivable continuity plan:

IDENTIFY RESOURCES

This is the planning stage, so it’s important to take a deep dive into everything you do and use to complete your job in the accounts receivable department. What is crucial to you running your accounts receivable department at full speed? Do you keep paper copy files in the office? Do you work on the internet and need a good, high-speed connection? Are you using Excel sheets that are located on local files on desktop computers? Everything that you use every day to complete your job, that you couldn’t do without in the accounts receivable department should be considered and documented. Once you have your completed list, it should include all the functions necessary in accounts receivable, including the credit department and accounting executives. No resource or item is too small if it aids you in completing a necessary task of your job.

DETERMINE MAXIMUM DOWNTIME

Now it’s time to take all the named resources in the previous step and prioritize them. You’ll be prioritizing these resources so that, when or if a disaster occurs, you know which resources are critical to your business and which resources could wait. You can think of this in a medical sense. If someone has a heart attack and breaks their wrist when they fall down, would you want the doctor to attend to the heart issues first or the broken wrist?

Now, take your list that is prioritized from most important to least important and set a maximum downtime to each. This is the most amount of time your company can perform their daily tasks without that particular resource. Think about it this way: if you’re working off paper files and those are all destroyed, can you reasonably continue invoicing customers within a matter of days? Or, if you’re using an online system and the building is destroyed, can your employees work from home?

IDENTIFY PREVENTATIVE MEASURES

During this step, you will take the time to consider how you can avoid the disasters that could occur. There are some disasters that you simply can’t avoid, no matter what steps you take. You can’t stop a tornado or hurricane from coming. However, you can take steps to make sure that your critical business resources are protected if something like that occurs.

One way that you can protect your accounts receivable information and files is by considering using a cloud based accounts receivable management software. This way, there are no paper files that can be damaged. All of your critical information is stored in a database that is protected by the company hosting your information. Additionally, if your brick and mortar location were to become unusable from the disaster, your employees can continue working from a remote location.

DOCUMENT

Your entire continuity plan should be documented and accessible by your accounts receivable team. You should make sure all team members are aware of what to expect if something like this were to occur. Additionally, this should extend further than just your department. You should collaborate with the executives in your company and the sales department to ensure that they are aware of how you will prepare and plan for a disaster.

RECEIVABLES DOCUMENT MANAGEMENT

Receivables document management can protect your accounts receivables from damage.
Find out more here.

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