What Would You Do If ...?

From the Jan./Mar. 2008 Issue

You’re either reading this article during the holiday break or you’re back in the office and it’s the first week of January. For most practices, especially tax-heavy ones, only a few days remain before the onslaught of clients, W-2s, K-1s, 1099s and everything else that accompanies this most wonderful time of the year: Tax Season.

But aside from throngs of clients lining up at your door, are you prepared for other potential challenges you might face during the tax season? A variety of contingencies could negatively affect your firm’s busiest time of the year, and while there aren’t always pat answers or solutions, there are technologies that can remedy some of the effects of these events. The most notable among these are simple: Remote access capabilities, power surge protectors and online data backup systems.

Of course, just taking a few minutes to consider the potential of these events can also make coping with the challenges easier. So think about what you would do if faced with one of the following events:

If the power goes out, your practice will be closed until it comes back on. It likely would also affect your neighboring competition, so the risk of losing clients to them isn’t too great, but the forced temporary closure of your office can have significant effects on deadlines, especially if the outage is prolonged. If the power goes out during business hours, there is an entirely different concern: Are your computers and servers on a UPS system (uninterruptible power supply) that allows you to power them down safely and protects them from power surges? Is the client return you’re working on saved? Even short-term power outages can cause major headaches, and UPS systems can be your aspirin.

Since the tax season falls during the hardest winter months in the north, the traditionally wettest months in the west, and the beginning of severe thunderstorm season in the Plains states, the potential for significant weather events can affect all practices. While the results are usually short-lived like power outages or temporarily closed roads, more significant events can cause towns to be cut off or difficult to reach for longer periods, or they may even result in damaged buildings. If your servers are still up and you can access them remotely, you can easily work from a temporary location almost immediately. The same is true if you utilize an online data backup system. If setting up a temporary work site, you will also need to get the word out to your clients. Note: While there are only a couple of online tax programs on the market, there are several technologies that can assist in remotely servicing those clients.

Even if everything is going smoothly and the weather is nice, you can still be struck by a crashed computer or server. While systems are much more reliable than in the old days (10+ years ago), sometimes they give out, whether it’s due to power surges, corrosion, faulty parts or other causes. For sole practitioners whose one computer is the hub of their practice, this can be an involuntary career-changing moment. But even larger practices are vulnerable when it comes to their file servers since they usually act as the central repository for client data. Data backup, whether online or disk-based, is the key to surviving this challenge and getting back up and running as quickly as possible.

Accounting and tax practices necessarily handle a lot of very sensitive financial data and identifying information. So it is imperative that practices secure that data from prying eyes. This means setting up rigid security protocols for wireless access, as well as having need-to-know password access to client files only for staff working on particular clients. Automatically updated anti-virus and SPAM/phishing blockers also reduce vulnerability.

Still in the realm of a security breach is the potential loss of a portable computer with client data on it. Laptops and wireless access have been a great productivity boost, but unfortunately they sometimes disappear from our car, restaurant table or other location. Aside from being a financially expensive loss, the potential threat to your clients’ data is also significant. First off, your laptop should have at least the same protective features as your office systems, including strong passwords, virus protections and other features designed to prevent the bad guys from seeing the information even if they do grab your computer. A new breed of programs can track a laptop and lead police or users to its location.

Even without some new pandemic, people get sick, even you and your staff. For ordinary colds and even the flu, we often suffer and work through it. But significant illnesses can be the end of a practice, especially for smaller firms without a plan for business continuity in case of the principal’s incapacitation. Who will pay the bills and the paychecks at a sole proprietorship? Who will manage a specific department if there is a vacancy on March 10? For very small firms, what will happen to your clients if your office is closed? You might consider a pact of sorts with a friendly competitor who would usher your clients back to you when you’re able, but it’s still a tentative situation.

There is no singular tool that can help the small or mid-sized practice overcome a significant event. Instead, you must consider all of the potential problems you could encounter and at least think about how you would cope with them if one or more were to hit during your most critical time of the year. This will likely include adopting technologies that enable you to work from any location, to safeguard your client data and to protect your infrastructure. But it absolutely requires that you plan ahead for these contingencies.

One or more of these events will likely happen during the course of your professional career. The only question is which ones, and what would you do if they happened during tax season?


Mr. O’Bannon is the technology editor for The CPA Technology Advisor. He can be reached at isaac.obannon@cygnuspub.com.