Backup Systems & Financial Continuity

(Or: "How to ensure your business survives your vacation/hospital arrest/alien abduction")

________________________________________

3.6.1 Accounting Backups (Physical vs Cloud)

The Data Survival Matrix

Backup Type Pros Cons When to Use

Physical Hard Drives - No internet needed

- Fast local access - Can be stolen/damaged

- Manual updates For sensitive data requiring air-gap protection

Cloud (Indian Servers) - Automatic

- Access anywhere

- Version history - Recurring costs (₹2-5K/yr)

- GST compliance concerns Daily bookkeeping (Tally/Zoho backups)

Hybrid (Recommended) - Best of both worlds

- 3-2-1 Rule compliance - More management All critical financial data

🔥 Horror Story:

A Pune CA firm kept only physical backups in their office. A pipe burst destroyed:

• 7 years of client records

• Ongoing audit documents

• ₹23L in recoverable ITC claims

3-2-1 Backup Rule:

3 copies | 2 different mediums | 1 offsite

________________________________________

3.6.2 Cheque Signatory Continuity

The "What If You Get Hit By A Bus?" Protocol

Legal Requirements:

• Mandatory: At least 2 authorized signatories per bank account

• Acceptable Signatories:

o Directors (for companies)

o Partners (for LLPs)

o Specifically named employees (via board resolution)

Pro Setup:

1. Primary: Founder/MD

2. Secondary: CFO/Trusted Director

3. Emergency: Spouse + CA (with ₹5L transaction limit)

💀 Nightmare Scenario:

A Coimbatore founder was hospitalized without cheque signing authority:

• Salaries couldn't be processed

• Vendor payments defaulted

• 37% staff quit within 2 weeks

________________________________________

🛡️ Continuity Health Check

"How disaster-proof are you?"

Parameter 😱 Praying Daily 🛠️ Basic Prep 🛡️ Fort Knox

Backups Last saved 6 months ago Weekly manual backups Automated cloud + physical + 1 password manager

Signatories Only founder can sign 2 signatories but no limits 3-tier hierarchy with transaction caps

Recovery Test Never tried Annual test Quarterly fire drills

________________________________________

🚨 Emergency Protocols

"When systems fail:"

Disaster Immediate Action Permanent Fix

Server Crash Restore from latest cloud backup Implement real-time sync (like Veeam)

Signatory Unavailable Use bank's emergency process Pre-file resolution with bank

Ransomware Attack Isolate network + restore from air-gapped backup Train staff on phishing tests

________________________________________

📌 Founder's Continuity Kit

1. The Crypto USB

o Keep a password-encrypted USB in bank locker with:

 Backup of all auth documents

 Digital signatures

 CA contact details

2. The Dead Man's Switch

o Set up automated emails to your lawyer/CA if inactive for 14 days

3. The Cheque Playbook

o Maintain pre-signed cheques (up to ₹50K) with your spouse

o Store in sealed envelope with CCTV coverage

________________________________________

🎯 Final Thought

"Business continuity isn't about avoiding disasters—it's about making sure the right people can pick up the pieces when you can't."