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The Year 2000 problem started decades ago when early computers had limited memory and storage space. Programmers saved space by abbreviating a four digit date down to two digits-so, 1954 was stored as 54. Reducing the years to two digits is fine as long as the century does not change, as the next century approaches the problem arises when computers have to process 2000 as "00" which some will read as 1900. The systems do everything from generating bad data to just shutting down altogether.
But it is not a time to panic. Instead it is a time to get organized, to review procedures, and update when needed.
Problems created by the Year 2000 are not limited to the business world. All of our personal lives are touched by date sensitive matters. Consider the following list of Year 2000 readiness actions for your personal lives:
The above list is not all inclusive, simply a guideline to follow or add to your own list.
Businesses are affected in different ways and to different degrees. Most popular accounts of the problem have been focused on software. Most organizations will need to analyze their accounting, payroll, accounts receivable and other related business applications. Most software companies have a Y2K upgrade available and are typically less expensive than a new software purchase. The IRS says that it will allow a full tax deduction in a single year for businesses having to repair or convert existing software.
Computer hardware is another area of concern. Most computer companies offer a Year 2000 testing and consultation service. If you do not have someone in your company to evaluate your hardware it is advised that you contact your computer service representative to setup an evaluation of your equipment. IRS has not addressed a special deduction for hardware upgrades.
Computer software and hardware are the most critical areas affected by Y2K, but do not overlook other systems within your business that could be affected. Anything controlled by a date sensitive embedded system could be affected. Following is a sample listing of systems that you should consider evaluating. Please note this is not meant to be an all inclusive listing, it is simply a guide to help identify embedded systems for Year 2000 compliance.
As a business owner you cannot sit back and assume you are unaffected. You have business relationships with customers, vendors and other service providers which will depend on you to be Y2K compliant. You must devise a plan of action as soon as possible. Outlined below is a 5 step plan to achieve your Y2K readiness:
This five step plan is detailed in the SBA website (www.sba.gov/y2k). This site also offers a comprehensive link to other information concerning Year 2000 readiness.
As a business owner Y2K sounds like a big headache, but don't be intimidated. If you implement a plan of action NOW you can be ready. It seems as though Y2K fixes cause an abundance of additional expenses that do not add to your net income. But the cost of waiting to fix failures after they happen will be far greater than anticipating them.