Insurance for Business is a tool for risk management that lets corporations turn the risk of a loss over to an coverage company. By paying a usually minor premium to the policy agency, the business can guard itself from the possibility of taking a much bigger financial hit. Businesses of all natures need to insure against such risks, things such as theft, natural disasters, fires, fatalities, general accidents, and or the disability of their employees. Business coverage is especially necessary for small businesses. Frequently, the tiny office owner(s) complete savings are invested in the firm, being that the owner(s) must take precautions to guard his or her family from the financial problems that could potentially interrupt establishment operations, cut profits, or even cause the business to close. Policy would boost a small companies success by eliminating some of the uncertainties in which it performs. It lays the potential risk of financial burden elsewhere so that the person(s) in charge must focus the fundamental attentiveness on the firm. In fact, the premiums paid for most kinds of insurance are considered tax deductible office expenses.
Most large organizations hire on a risk management expert to find and create strategic plans to deal with the risks at hand, but many tiny establishment owners usually take the risk management job on themselves. Although it’s very possible to circumvent, assume most risks, or reduce a lot of risks, only a handful of companies can truly afford to guard themselves in full without investing in some sort of establishment policy. Though a lot of small corporations today have no insurance or are underinsured.
The unpredictability of human life is something which cannot be gambled with and therefore one should always be prepared for anything which may just occur out of nowhere and cause great stress and problems in our lives. Even our business is similar to our unpredictable human life where you don’t know what will happen the very next second and therefore it would not be wrong to say that any business establishment is accompanied with its downtime which may be abrupt but is certainly there in the present past or future of the company. You may certainly begin the proceedings with an impressive start and lots of profit in your business but it’s no guarantee of a smooth and hassle free future always.
Often the small losses in any business can be covered without incurring any dent on the financial stability of the business. But sometimes when there are unpredictable hefty losses they can certainly cause huge mental stress and trauma for the businessman and therefore to minimize the risk quotient involved in the business it’s advisable to opt for commercial business insurance so that the person is sure that their future will still be bright no matter whatever problem occurs in the present.
The insurance is way of safeguarding your future from all the unpredictable danger by paying a small amount of money every month so that the big picture, which is your life, is secure and you can claim it back whenever you are in need it. Therefore by purchasing any insurance you are actually transferring the risk quotient in your life to that Insurance Company from whom you are purchasing the Insurance for a specified amount. Thereby you can sleep peacefully at night.
We may find writing an insurance check every month as stupid for various insurances like shop insurance, auto insurance, liability insurance, Landlords insurance and property insurance and so on. We may also feel our selves to be fool by investing in these insurances, our hard earned money especially when are lives are moving on so smoothly. But it’s the unpredictability of any accident or any untoward incident which you can never be sure of and therefore instead of living in the constant fear of something unfortunate it’s better to start preparing for any circumstances which might amaze you at any point of time. The insurance is just like our savior which protects us from our helplessness and stress during such situations and therefore reduces the graveness of the incident to a large extent.
Reasons Businesses Fail with Internal Collection Initiatives… No formal policy Staff lacks experience Lack of manpower Lack of Enforcement of Policy The Customer is Always Right…”I Don’t want to Lose Them as a Client” No Client tracking Wrong methodology Lack of credit reporting Waiting too long to outsource problems Lack of an outsourcing partner When they don’t know WHAT to do, they do NOTHING! In a recent study performed by Flagmen Research Center the primary concern of CEO’s is that of their current cash flow process,”lacking”. It seems that businesses worldwide have identified this as a concern. But what are they actually doing about it?This is the First of a Ten article series, I will be writing. Each article will discuss each one of the 10 reasons why Internal Collections Fail, and in retrospect why cash flow is plummeting. Let’s start with the first reason of internal failure LACK OF POLICY Now folks, in order to do absolutely ANYTHING effectively in your life, there are steps you must take to do so. Can you drink a glass of water, if you have not filled the glass with water? Can you start your car if you have not put the key in the ignition? Would you begin putting your pants on, by first zipping your zipper? Would you begin watering your garden before you planted the seeds? These questions are of course very simple and common sense oriented. However, so is the cash flow process? Without policy, a written scheduled directive of the flow process for an internal receivables staff to execute, how can you possibly believe that your business will succeed? Lets use accounting terminology to bring this point home…Would you send a final demand notice to a client whose invoice is not even due yet? Would you extend a credit line of $50,000 to a company who had dissolved 4 prior business ventures in the past 3 years and simply changed their company name to escape past creditors? If on your aging report you see a client who had a balance due in each bucket from current to 180 days , would you approve credit again on their next order? If a client called you and said YOU ARE NOT MY PRIORITY , I have other vendors that need the money I owe them more then you do, would you continue to act as their bank, just to say you have them as a customer? Now for you these scenarios may seem silly. However in my line of business, they are facts. I have clients that before they came to me, there was no policy. I have clients that had taking the time to create a policy and send out a memo re the policy, but it was never executed or acted upon. I have clients that had created, and implemented and trained their staff, however it was never enforced. Each individual employee made exceptions to the rules…then I received phone calls from potential clients in desperate immediate need. From an extremely HIGH DSO, to hundreds of thousands of dollars collecting dust, rather then cash flow, sitting in their aging buckets, to clients with a desperate need to find their customers that were giving credit without any prior check up and suddenly they had disappeared. Sound familiar? CREATE, DOCUMENT, DELEGATE, EXECUTE, ENFORCE, & MEASURE POLICY. O.K. Now it is time to sit down and CREATE your cash flow policy. Consider all aspects along the flow process. From potential client screening, to data entry and follow through of credit applications, to the documents that should be included in your credit screening package ( ensure signatures are requested on all documents), to the criteria schedule of credit terms and conditions extended, “new client tracking “, annual current client “check ups”, a strict schedule of the collections process, 1 courtesy call prior to due date, 2 calls post date, 2 late notices, 1 final demand and then submission to a third party agency. Also always ensure there is ONLY 1 employee with the authorization capability to extend payments arrangements and lift suspension of credit without payment. If everyone has the authority to make exceptions to YOUR policy, why are you creating it? Now, Document your policy in writing for your accounting staff , sales staff, and customer service staff to review. You may say why would Sales or Customer Service need to review and understand MY receivables Policy. I’ll tell you why. When a salesperson is to the point where they are getting ready to close a sale, their heart is beating, their blood pressure is high, they are excited…they are going for THE CLOSE. Do you think that a credit application being incomplete is going to stop them from making that sale? Do you think that a Customer Service Rep who has been appeasing a client for 20 minutes into her lunch break is going to continue and try to gather all of the facts regarding the dispute, or are they going to tell the customer they will issue a credit so she can run to the break room and get the latest “water cooler” gossip? Can you walk properly if only one leg moves? Can you pick up something if only 2 fingers bend for grasp? Everyone involved directly, and indirectly should know what the policy consists of. From credit applicant screening, to criteria for credit terms and conditions, which documents are in need of signature and once you extend credit, who will be watching the new client for the first year, to ensure habits don’t change. Every single step should be outlined as a directive in writing , and each person within your organization should know their part. This is important when writing your policy, ensure you DELEGATE responsibility for each item to a department head or specific title within your organization. using individual names if non productive, you don’t want to have to change the document each time an employee comes or leaves. However using a title or department head shows who is responsible for each directive and they will be the ones to hold accountability. The salesperson should know they can NOT close that sale until that credit application is approved. The Customer Service Rep should know she can NOT offer a credit without all of the facts. Your collections team should know that after 3 phone calls, 2 voice messages, 2 late notices and a final demand letter 2 weeks ago, the account is immediately placed into collections BEFORE it rolls into the 90 day bucket. (these are just examples of collection schedules). You have created your policy, you have documented it, and you have delegated the procedures and responsibilities. Now it is time for execution. Do not think that simply because YOU understand the process and procedures within your policy that your employees do as well. I am not saying that they are not as intelligent, nor am I saying that you do not know how to write effective policy, what I am saying is that EVERYONE should understand clearly, so to have as little trial and error proceeding forward. So, meet, speak, answer questions, explain, reiterate. ENSURE that each department, each manager, each employee knows their responsibility and that of the other departments. If a client calls and wants to place an order, does the customer service rep know who to contact for a credit application? If a sales person receives a call and their client requests an extension of credit terms, who should they contact? All of this is menial yet crucial! You can breathe now. Believe it or not, the tough part is over. Now, with enforcement, this should be easy as long as you made your policy clear and concise with limited flexibility available. There will be trial and error, it is new and different. Not only internally but with your clients as well. No one is happy about change, until they see the benefits from that change.”Through Change, Comes Growth”. Take complaints, ridicule and whining in great stride. In the end, your cash flow will improve, your bonus will increase and your businesses reputation will by far be complemented. Last but certainly not least is the CONSISTENT MEASURING OF THE POLICY. Do not be mislead when I said the hard part was over. There is ALWAYS room for improvement. On a monthly basis, you should review your financial reports. On a monthly basis assigned employees should monitor and measure the new clients who have been extended credit and ensure there are no red flag signals emerging. If there are, there should be IMMEDIATE measures taking to prevent loss. Annually, all clients, new, current and even long term customers should receive a financial “check up”. Not many thought that Boscov’s or KB Toys would file for Bankruptcy. One year EVERY salesperson on earth wanted to meet with their VP of Purchasing, the next year, they were in the process of dissolution. Do you think a salesperson today would want to meet with them? Of course not, there is no need, because the company filed BK. So the point is , YOU never know, but you can secure the amount of loss through regular checkups and research. Each month, following your newly expedited policy, there should be improved on your receivables. Each quarter there should be improvement. Now when you get to a point that there is no improvement, don’t stop there. Revisit your policy and see what tweaks you can add to bring ongoing improvement. Until the next article, I wish you continued success and Increased Cash Flow! Jennifer Stacey Director of New Client Portfolio Development ABNA International Direct: 302 883 8564 E Connect: email@example.com site: www.abna.us
Business continuity planning (BCP) is the creation and validation of a practiced logistical plan for how an organization will recover and restore partially or completely interrupted critical functions within a predetermined time after a disaster or extended disruption. The logistical plan is called a business continuity plan. Hence, BCP is the phenomenon by which a company plans out, how to stay in business in the event of disaster. Incidents include local incidents like building fires, regional incidents like earthquakes, or national incidents like pandemic illnesses. The company has a formal printed manual available for reference before, during, and after disruptions have occurred. In 2007, the British Standards Institution published another standard part for BCP, BS 25999-2 “Specification for Business Continuity Management”, that specifies requirements for implementing, operating and improving a documented Business Continuity Management System (BCMS). BCP methodology is useful for any organization of but adopted by only regulated industries. However every organization should have one in order to ensure the organization’s longevity. It is evident that firms do not invest enough time and resources into BCP preparations are sufferer in disaster survival statistics. According to a research study, fires permanently close 44% of the business affected. In the 1993 World Trade Center bombing, 150 businesses out of 350 affected failed to survive the event. Whereas, the firms affected by the Sept. 11 attacks with well-developed and tested BCP manuals were back in business within days. For a small organization, BCP manual may be simply a printed manual, containing full details of crisis management staff, general staff members, clients, and vendors along with the location of the offsite data backup storage media, copies of insurance contracts, and other critical materials necessary for organizational survival. For most complex organizations, a BCP manual may outline a secondary work site, technical requirements and readiness, regulatory reporting requirements, work recovery measures. They should have all the documents for the reestablishment of physical records, a new supply chain, or new production centers. The development of a BCP manual can have five main phases:
?? 1. Analysis: study of various impacts and threat, its consequences. ?? 2. Solution design: to identify the most cost effective disaster recovery solution?? 3. Implementation: execution of the design elements identified in the solution design phase?? 4. Testing and organization acceptance means to achieve organizational acceptance that the business continuity solution satisfies the organization’s recovery requirements?? 5. Maintenance: divided into three activities,a)??? the confirmation of information in the manual, roll out to all staff for awareness and specific training for individuals whose roles are identified as critical in response and recovery. b)??? the testing and verification of technical solutions established for recovery operations. c)??? the testing and verification of documented organization recovery procedures. Microsoft’s Business Continuity Solutions
Microsoft Windows Server 2008 provides the most robust business continuity platform, delivering proven technologies like Network Load Balancing and Clustering as part of the operating system. It also provides support for a wide range of industry-leading, shared-storage solutions to deliver Quick and Live Migration along with partner cross-site data management and data replication technologies. IBM – COOP Systems
IBM Business Continuity and Resiliency Services is working with COOP Systems headquartered in Herndon, VA to provide business continuity management software namely myCOOP. With a reputation for no risk deployments, low costs, and ease-of-use for all types of users, myCOOP is the next generation of business continuity software.
A risk management plan is critical towards a company’s business development, as it is a part of the business plan that details the risks of the business. Detail financial risks and risks about a customer base with help from an experienced businessman in this free video on planning a business. Expert: John Niemira Bio: John Niemira is a business professional who has been in the business industry for many years. Filmmaker: Michael Burton