When your business suffers a disaster such as a fire, flood, or even rioting and looting, you may end up having to reconstruct vital business records. Most businesses in this situation won't be able to reconstruct absolutely everything, so focus on these three key categories and what you can do to obtain the needed information again.
1. Operational Documents
One of the earliest things to reconstruct is data about what your company owes and what it is owed. If you use cloud-based software, this part will be easier. Your accountant may also have some records in their system, depending on what they do for you.
If you don't have digital records, reach out to vendors, customers with whom you have a good relationship, and your bank for current statements from their records. Speak with anyone with whom you have current contracts to get copies of the contract and payments so far. You may also be able to ask for hardship extensions.
2. Damage Documentation
Insurance companies and your accountant will need to know what business property was damaged. Obtain purchase information and receipts from vendors where you bought large equipment that was lost or made unusable. Look for business and personal photos that may show that equipment before the disaster. Take photos of all the damage from the disaster and use these for comparison.
Perform a complete inventory of your business tools, equipment, supplies, and inventory. Research the market value of equipment and tools before damage as well as after damage. Work with vendors and staff to properly value your inventory based on the last verifiable inventory count and the current inventory count. The difference is a one-time expense.
3. Tax Documents
After you handle the immediate reconstruction work, it's time to get the information needed to file your taxes and prove deductions. You can also often get an extension if needed.
Start by requesting copies of your prior year's tax returns from your accountant or the IRS and state tax agencies. Ask vendors for statements or invoice copies of all purchases within the current tax year and gather your own bank statements for the same period. In the absence of standard documentation, you can use things like photos of equipment and written verifications from vendors to prove deductions.
Where to Start
If this sounds like a lot of work, start by getting help from a qualified public accountant. They have worked with businesses in many situations, likely including post-disaster reconstruction. Meet with a public accountant in your state today to get tips and assistance getting your business on the road to recovery.
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