The world is changing faster than ever. Is your business continuity plan keeping pace?

Between the COVID pandemic and ensuing shutdowns, supply chain debacles, the labor shortage, gas price hikes, increased cyber threats, the war in Ukraine, catastrophic weather events, and now, uncertainties surrounding the economic environment, the last three years have proven time and time again that continuity planning should be a regular, ongoing part of running a business.

A business continuity plan proactively anticipates internal (i.e., you suddenly become incapacitated) and external (i.e., a global pandemic) events that can disrupt your business and defines how you’ll prevent, mitigate, respond, and recover. At the end of the day, a plan can help you maintain operations, minimize impact on your business and others that depend on you for their business; protect staff, finances and brand; and return to normal as quickly as possible.

Take a ransomware attack as an example, since it can shut down operations an average of 20 days. Your plan would detail what you’re doing to prevent an attack; how to minimize the impact should an attack occur; how to keep operations going despite an attack; and what you would need to do to get business operations back to normal ASAP.

Developing the plan should be a team effort among key people in your organization. That way, everyone knows the protocols to follow and can react with speed and clarity should the need arise.

According to InvenioIT – an industry leader in business continuity, data protection and IT security, your plan should identify objectives and include important contact information; risk assessments; business impact; prevention; response plan; systems planning; backup locations and assets; communication plan; testing protocols; and gaps and recommended fixes. (Refer to InvenioIT for details.)

As noted by Everbridge.com – a critical event management platform company, manufacturers should make sure their plan includes backup vendors, machinery and facilities; alternative workflows, routes, and scheduling; response to IT outages and disruptions; and how you’ll communicate with key stakeholders.

The U.S. Department of Homeland Security along with FEMA developed a free, downloadable business continuity planning suite. It includes training resources, a plan template, and test scenarios.

Perhaps one of the most challenging parts of continuity planning is figuring out how to prioritize what your plan should focus on first.

RiskMethods.net provides some ideas to help get the ball rolling: “In manufacturing, consider events that can cause significant unplanned downtime in operations like severe weather; hazardous materials issues; supply chain disruptions; and equipment failure. If you’re a manufacturing company, any business processes that make you unable to continue producing an important share of your product portfolio should be labeled as critical business processes.”

ContinuityCentral.com’s article, “Myth Busters: A Business Continuity Statistical Mystery Solved?” (Geary Sikich, Feb. 19, 2020) includes a list of questions that can help you prioritize – here are my favorites:

• “What are the three to five scenarios that could put our company out of business?
• Do we have a set of early warning indicators for emerging threats to the business?
• Are we developing accurate assessments of the issues facing our organization (direct, indirect)?
• What opportunities have we missed over the past three years due to inaction rather than lack of knowledge?”

You may also want to check out Accenture’s research report on operating through volatility, which includes a five-pillar framework for understanding immediate and potential future risks:

• “The people that power the organization
• The overarching strategy of the organization and how it differentiates the company
• The systems that underpin operations, both internally and with customers
• The supply chain and operational network that allow the company to fulfill customer needs.
• The partner and customer ecosystem and its alignment to business goals.”

Since so many factors impacting business can change on a dime, be sure to review and update your continuity plan at least every six months.

While you’re focused on protecting your business, let RBT CPAs focus on protecting you by providing professional, ethical and top-notch accounting, auditing and tax services. We’ve been serving businesses in the Hudson Valley and beyond for over 50 years and believe we succeed when we help you succeed. To learn more about what RBT CPAs can do for you, give us a call today.

If your organization is struggling to find talent – a common position given the Great Resignation of 2020/2021 and a continuously tight labor pool, you may want to tap into groups that have traditionally faced significant barriers to employment. While helping you address staffing challenges and boost workforce diversity, it may also result in valuable federal tax credits through 2025 – a worthwhile proposition given the escalating benefit and payroll spending you may be experiencing as you compete for talent.

The Work Opportunity Tax Credit (WOTC) has been around in various forms for decades. The Federal government updated it during the COVID pandemic to encourage employers to keep targeted workers on payroll and to encourage hiring them to rebuild staff following the worst of the pandemic. The WOTC was set to expire in 2020 but has been extended until December 31, 2025. It is jointly administered by the Internal Revenue Service (IRS) and the Department of Labor (DOL).

Targeted groups covered under the WOTC for taxable businesses include qualified IV-A recipients; qualified veterans (including disabled veterans); ex-felons; designated community residents; vocational rehabilitation referrals; summer youth employees; Supplemental Nutrition Assistance Program (SNAP) recipients; Supplemental Security Income recipients; long-term family assistance recipients; and qualified long-term unemployment recipients.  For tax-exempt organizations, qualified veterans are the only group eligible. Employees related to the employer or certain owners of the employer are not eligible. (For definitions of eligible targeted groups, click here.)

On or before the day a job offer is made, you and the applicant must complete Form 8850, along with ETA Form 9061 or ETA Form 9062. Within 28 days of hiring an employee, you must submit the forms to the state workforce agency to verify the employee is a first-time qualifying member of a targeted group. You’ll receive confirmation on whether the employee meets eligibility criteria. Then, you can file for a tax credit ranging from $2,400 to $9,600 for each targeted worker through 2025.

Taxable employers claim the tax credit as a general business credit against income taxes on Form 3800. The credit cannot exceed business income tax liability.

• Qualified tax-exempt organizations claim the credit against payroll taxes using Form 5884-C. The credit cannot exceed Social Security taxes owed.

(For auditing purposes, all forms should be retained for a period of four years.)

There is no limit on the number of employees you can claim credits on, but there are limits on the value of credits. At a for-profit employer, a WOTC credit equals 40% of the first $6,000 of a targeted employee’s qualified first year wages for 400+ hours of service, for a maximum credit of $2,400. If an employee completed less than 400 hours of service but at least 120 hours, the credit is up to 25% of the first-year eligible wages or $1,500. A different maximum credit calculation may apply for qualified veterans and summer youth employees. Note! Certain wages – like federally funded on-the-job training – do not qualify for the WOTC credit.

At a not-for-profit employer, a WOTC for a qualified veteran equals 25% of qualifying first-year wages for 400 hours of service or 16% for at least 120 hours of service but less than 400.

To learn more, visit the DOL website, which has a fact sheet, reference guide, and more information on definitions of targeted groups. The IRS website has complete details, FAQs, links to forms, and more. The NYS Department of Labor website has additional information and resources.

If you have any questions or need assistance on this or any accounting, bookkeeping, tax, or audit requirements, RBT CPAs are here to help. Give us a call.