Reconstructing Business Records After a Disaster

Posted on Tue, Oct 17, 2017 ©2021 Drucker & Scaccetti

DSMarketing024-1.jpgBy: Eric R. Elmore

 

The latter half of 2017 has been a trying time for many U.S. businesses. Disruption and damages from Hurricanes Harvey, Irma, Maria and Nate, and California wildfires have affected business owners who now wonder how to carry on in the aftermath.  Insurance, federal assistance agencies and the IRS require certain documents, which may have been lost or damaged, to make claims and place values on losses. In today’s post, we’ll share some tips on getting your business house back in order after a disaster.

 

Natural disasters wreak havoc on all in their paths.  Businesses face unique challenges because they are the lifeline to the community and their employees. Reconstructing records lost or damaged in a disaster is a critical part of getting the business up and running again. Contacting your bank, attorney, insurance company, financial and tax advisors to alert them of the lost or damaged records is a great start. Many times, these organizations have back-up information to recreate your lost records.

 

There are other routes you can take to reconstruct records.  These routes may be tedious and time consuming but, sometimes, may be your only recourse. Here are four tips from the IRS for businesses that must reconstruct records:

  • To create a list of lost inventories, business owners can get copies of invoices from suppliers. The invoices should date back at least one calendar year.
  • For information about income, business owners can get copies of last year’s federal, state and local tax returns. These include sales tax reports, payroll tax returns, and business licenses from the city or county. These will reflect gross sales for a given period.
  • Owners should check their mobile phone or other cameras for pictures and videos of their building, equipment and inventory.
  • Business owners without photographs or videos can sketch an outline of the inside and outside of their location. For example, for inside the building, they can draw out where equipment and inventory was located. For the outside of the building, they can map out the locations of items such as shrubs, parking, signs, and awnings.

Rebuilding after a disaster in not only about bricks and mortar. Records, whether kept on a computer, server or in filing cabinets, are often more apt to be lost or damaged than walls and ceilings. When planning for future disaster possibilities, consider an off-site back-server to house your important business records.  Depending on your business or profession, such as some healthcare providers, arranging a back-up for your onsite records is mandatory. Check with your local regulatory body to ensure you are complying.

 

Contact your tax advisor immediately following a disaster to recover copies of current and prior year files. If possible, as with a hurricane with advanced warning, check ahead of time to ensure your advisors have your records backed-up in case you need to get copies afterwards.

 

Recovering after a devastating loss is difficult for a business. But, a little preparation can save lots of headaches and money in the end.  If you or someone you know is struggling with reconstructing their business records due to a disaster, call on us.  We are always prepared to help.

Topics: documents, tax records, Taxes, business, Harvey, Irma, federal assistance, rebuild, records, insurance, Maria, Nate, California Fires, Reconstruct, lost, damaged, natural disaster

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