Has Your Business Suffered A Natural Disaster? 5 Ways An Accountant Can Help

When your business suffers a natural disaster, every part of operations may be impacted. And while you work on getting the business up and running on a physical level, what should you do about your accounting books? The answer is to engage an accountant who can help with both the mundane reconstruction tasks as well as answering more complex accounting questions. Here are five things they'll assist with.

1. Reconstructing Books

If you use a cloud-based accounting software, your records of transactions and financial statements may be intact. In this case, you'll probably only need to locate new versions of hardcopy records as well as transactions that may not have been entered yet. However, if your books are done manually, the reconstruction may be a lot harder. An accountant will work on all these tasks. 

2. Handling Inventory Loss

If you maintain inventory and some of it was destroyed or rendered unsellable, you'll need to adjust your books to account for the loss. The biggest task is usually to find the right value for the destroyed inventory. This often calls for a reconstruction of inventory purchases and estimations of the costs of individual parts. Once you know how much to deduct, you enter it as an expense in your books. 

3. Retiring Damaged Property

Large assets such as heavy equipment, computers, and machinery are usually subject to depreciation for accounting and tax purposes. Have any of your depreciable assets been destroyed or made unusable? If so, your accountant will work to correctly dispose of these in your books. And if some were damaged but repaired, the accountant may adjust their value down — a move known as an impairment loss. 

4. Maintaining Payroll Continuity

While many accounting tasks can be delayed while you get back on your feet, payroll isn't generally one of them. There are many rules about how and when employees must be paid. And even in a disaster, you'll have to follow them. And you may or may not get a reprieve for related payroll tax deadlines. Outsource payroll work to an accountant to ensure it stays timely. 

5. Reporting Insurance Payments

Hopefully, your business was covered with insurance that will kick in and help right your ship. How do insurance payments, though, fit into your books? When and where are they accounted for and how might they affect the values of items being reconstructed? These are tough questions for the layperson, but an accountant is trained to answer them. 

Where to Start

If your business has suffered something catastrophic, get professional accounting help. Meet with a skilled accountant in your state to learn how they can help you recover lost information and properly record all the changes brought about by the disaster. 

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Smart Financial Decisions to Get Ahead

If you want to get ahead in life, smart financial decisions can help. On a personal level, you want to focus on low interest rates, strategic borrowing and setting up savings. With your business, you need to focus on similar matters, but you also have to think about investors, employee compensation, and long-term survival strategies. Whether you're dealing with one or both of these situations, I am setting up this blog to help. My name is Mary, and I have always had a strong interest in finance. As a result of my decisions, I was able to retire at 50, and now, I just write and share info. Please explore. I hope you enjoy these posts.

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