Are You Prepared in the Event of a Sudden Accident?

Over the years your business has grown and become more complex. Your income and expenses are larger now than they were 20 years ago. Today it takes computer hardware, software, passwords and authorizations in order to transfer cash between accounts, to order inventory or to just take care of the weekly payroll.

If you have a car accident or a heart attack, can someone else continue to take care of paying the bills, transferring cash, ordering inventory or continuing the day-to-day running of the business? Can someone else sign checks? Does someone else know all of the passwords needed at the company?

If you are out of your office for 60 to 90 days, who is next in line to run the company? Does that person have everything they need to step up and take over?

I realize you may have Will and Trust documents to take care of your personal assets. You and your spouse may have a Durable Power for Health Care Decisions and a General Durable Power for Financial Decisions. But if you were out of the office for 90 days someone needs to already have their name on the bank signature card in order to continue signing checks for the company. The person you already have on the corporate account may also have the ability to transfer cash from savings to checking.

Hopefully you have a second person who has the authority and the passwords to transfer cash. It is an old proven business technique to have one person with the capability of signing checks, and to have someone else handle cash transfers or ordering inventory. If you already have two or three individuals in your company that handle different segments of the day-to-day operations, are they authorized to continue their responsibilities for the next 90 days if you are out of the company? We recommend you really think about how you segregate or split up those responsibilities and enable those people to continue those duties if you are out of commission.

If you have a corporation, it is a good idea to record the names of the individuals who will have the authority to run the business in your extended absence in your corporate minutes. You might also mention that one person will have the title of general manager and another will have the title of bookkeeper if they work in the office every day. Those individuals, based upon their titles, would have the authority to fulfill their part of running the company in the case of your disability, and if documented in the minutes, there would be no question about each person’s responsibility.

Another suggestion would be to let your vendors know who your backup people are. Also inform your business attorney, accountant and banker that you have these emergency plans already in place.

Finally, make sure that your family knows who has the responsibility of running the company while you are gone, along with who will be signing checks, and who will be ordering more inventory and supplies.

Don’t put your company, your employees, your customers and your family in a bind if you are suddenly not able to go to work for 60 days, 90 days or longer. Protect the value of your company by making sure the right people have the information that they need in order to keep the doors open and keep the business working and profitable.