Staying Disaster-Ready in Treasury

A key aspect of any business continuity plan

All businesses face disasters that could threaten to interrupt their operations and play havoc with their cash flow. The key to surviving such events could very well be the resiliency of your treasury management function.

Indeed, a well-documented treasury continuity plan can help your organization anticipate likely scenarios, outline response actions and react rapidly, so you can more quickly resume normal operations and revive cash flow.

One of the first steps in developing a treasury continuity plan is to conduct a detailed review of operations and document all cash flow-related processes and how different disasters would impact them.

Another early step is to define all mission critical treasury activities—those you couldn't live without for several days—and determine how you could work around them if they were interrupted. For instance:

  • In the event of a disaster, how will you fund payroll and time-sensitive trade payment disbursements?
  • How would you bring in money from your cash concentration system?
  • How would you manage your cash position?

Partner with your bank

Your bank can help bolster your continuity capabilities through various treasury management solutions, allowing you to:

Make timely payments

With online and mobile banking applications, you can use your smartphone or other mobile device to review information, initiate and approve transactions, pay bills and manage accounts anywhere you have Internet access.

In a disaster, you'll also benefit from electronic payment origination capabilities your bank can provide, including wire transfers and Automated Clearing House (ACH) payments that don't leave you subject to Postal Service delays. For example, direct deposit of payroll lets you electronically deposit pay into employee accounts and avoid delays in distributing payroll checks.

Collect payments

Remote deposit capture can enable staff to deposit checks into a bank account online, when physically transporting them to a bank branch would be challenging.

Meet temporary financing needs

Talk to your banker about establishing a line of credit sufficient to keep your business afloat if cash flow from customer payments were to dwindle temporarily.

Keep cash on hand

If you're a retail business with a lot of cash receipts, and you must be able to make change, plan to order extra coin and currency from your bank in advance of forecasted bad weather events.

Make emergency purchases

Commercial cards can enable essential personnel to cover emergency business expenses.

Protect critical business documents

Safe deposit box services can help you protect important financial and other business documents from being destroyed.

Test to evaluate preparedness

It's not enough to draw up a good plan and adopt banking products that are useful in disaster situations. You also need to train your treasury staff on every facet of your plan, so they know what to do and how to use the tools at their disposal.

Don't wait until a disaster strikes to learn if your treasury continuity plan works. Test your plan regularly, using table-top or actual hands-on recovery exercises.

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