By Ann Meyer
— Chicago photographer Jimmy Fishbein hasn’t forgotten the terrorist attacks that struck New York 10 years ago, where his photography studio was located at the time.
Fishbein lost just about everything, including his portfolio, when his studio next to the World Trade Center got caught in the disaster of Sept. 11.
I basically had to start over, because I had nothing to show, said Fishbein, who grew up in Deerfield and moved back to Chicago in 2003 to start fresh.
One small consolation: He had been conscientious enough to back up his financial records on an external hard drive that he kept in a sealed box. It survived the disaster, while his computers, photography equipment, furniture and other belongings did not.
The disaster reinforced a lesson small business owners often overlook: Take the time to safeguard what most important to your business. If disaster strikes, you ll be glad you did.
Businesses also should put in place plans that include a system for business continuation and emergency communication in the event of a disaster.
Don t think that it can t happen, Fishbein said. Security experts and accountants have been giving that same advice for years. Yet planning for the worst is often the last thing on small business owners minds. Most are stretched thin, and record keeping and security issues often fall by the wayside.
Planning for the worst
While many companies added disaster preparedness plans after Sept. 11, some apparently have become lax since then, according to the Society for Human Resource Management‘s HR Magazine. About one-third of organizations recently surveyed by the society said they felt they were well prepared for potential threats and disasters. This minority sentiment emerged despite the fact that three-quarters of organizations said they had formal disaster preparedness plans in place, down from 85 percent in 2005 but up from 54 percent in 2001. SHRM reports that large corporations are more likely to have communication and business continuation plans in place than small businesses are.
In reflecting on the Sept. 11 attacks, Fishbein said the experience taught him to be appreciative of life, but he also became more vigilant in securing his images. Now working in Pilsen, the 38-year-old commercial and portrait photographer backs up everything he shoots on a daily basis using a computer program called Carbon Copy Cloner. Each week, he swaps his hard drive at the studio with another at his home, so that he has a duplicate copy of everything.
While some companies rely on Internet-based storage using cloud computing, Fishbein likes being able to put his hands on the backups. “I like being in full control of my work and knowing it’s not going to be lost in the cloud,” Fishbein said.
While large corporations multiple locations serve as backup support, many small business owners think safeguarding their most important information means keeping a paper copy in the filing cabinet next to their computer, experts said.
If disaster strikes both, the business is out of luck. Record keeping is vital to the success of any company, said Roger Bierman, franchise regional manager at Fiducial. There are two or three items a business owner wants to know: How much money did I make, where did the money go, and did I comply with all the state and federal tax laws? Bierman suggested.
What to keep
You ll want records updated at least monthly to answer those questions. Bierman, a former small businessman who owned two Dunkin Donuts franchises and a service station, found using an expandable file and duplicate checks was the best way to keep track of important information back then.
Monthly financial reports are pertinent not only when making day-to-day business decisions, but also when forming a long-term strategy, spotting problem areas or seeking funds from a bank or outside investors.
Comprehensive records also are critical if the Internal Revenue Service requests more information or audits your company. At a minimum, keep a monthly summary of your business transactions, with detailed information kept in an accounting journal or ledger. Your books should indicate gross income, deductions and credits, according to the Internal Revenue Service.
You ll need to keep tax records for a minimum of three years, and often longer. Keep invoices, purchase orders and cancelled checks at least seven years, experts said. And be sure to jot a note on receipts to identify what the expense was for. Several years from now, you might not remember.
Keep transaction records for real estate and other assets indefinitely, as well as important business documentation such as incorporation papers. Staff records should be maintained for at least four years and employee benefit plan information should be held for a minimum of six.
Staying on top of financial records
Fortunately, the same records that will help you gauge your business progress, set new goals and forecast the future also will come in handy if you re audited. The IRS usually has three years to audit a return, though that statute of limitations can be extended. For records that would help you through an audit, the IRS recommends keeping your records for seven years. In cases of fraud, however, the IRS can go back indefinitely. Besides the actual numbers, keep evidence that will support a deduction, such as a receipt, canceled check or restaurant bill.
Still, in the event of a national disaster, the IRS has been known to be more flexible. “When I spoke to the IRS about my situation, they were very understanding, recalled Fishbein, who filed an extension for tax year 2001 because he couldn t get to his records before the deadline.
The key is stay on top of your finances. Don t expect your shoebox of receipts to survive a flood, fire or national disaster.
Since arriving in Chicago eight years ago, Fishbein has rebuilt his company by serving three distinct client sets — magazines, corporations and individuals — and maintaining a focus on quality, he said. But he hasn’t forgotten the past.
Just because I was part of the most tragic day in American history, I don’t think I m immune to something like that happening again, Fishbein said in a previous interview.
But knowing his work is backed up and stored in two different locations means Fishbein has less to worry about.
Portions of this article previously appeared in the Chicago Tribune.