Author: Jason Hagan, Vice President, Treasury Services Product Strategy
You’d like to think your business is safe from fraud. But there are many, sneaky ways that those with ill intent—both inside and outside your organization—can take advantage of your company. But, by noting the below risks, you can begin to plug any leaky opportunities for fraudulent activities.
According to the 2018 AFP Payments Fraud Survey, payments fraud reached a new high in 2017. A record 78 percent of all organizations were hit by payments fraud. The true culprit? Paper checks. Of those who reported fraud, 74 percent of respondents reported this form of attack.
Those little pieces of paper give fraudsters everything they need to steal your money—account number, routing number, and even your bank and address. It’s like handing burglars the key to your house.
Paper checks give culprits multiple ways to strike:
Furthermore, it’s hard to limit check exposure. How many people in your company have access to your check stock or signed checks? When you drop a check in the mail, how many people can see it or take it? What about the recipient? You have no idea who receives the check at a company and all the individuals that have access to that information.
To avoid check forgery, you should move to paperless payment methods such as EFTs, ACH transfers, and more. It restricts access to crucial banking information and provides elevated levels of security.
Employees should have clearly articulated roles in any process that can result in payments or transfers. If you lack definition around these critical processes, you’re setting your company up for fraud.
Awareness is one aspect. Execution is another. Passing paper invoices and checks from hand-to-hand is inefficient. It’s hard to track who has seen them, who has approved them, and who has paid them. It’s even more difficult to enforce time-tested rules like the separation of duties. For example, someone who reviews invoices should not be authorized to pay them.
This is where automated fraud prevention comes in. When you move to digital payments and adopt a bill payment solution, you’ll benefit from automated workflows. The system will enforce your guidelines, sending each invoice for review and tracking every step for auditing. No payment will be released until the proper protocol has been followed. No one can access the workflow process unless authorized.
Don’t give away the keys to the kingdom. Your online bank account is a virtual playground for those bent on ill intent—in your company and outside of it. You should share that information very sparingly—or not at all. It’s too easy for someone with that access to commit accounting fraud.
Once more, here’s where paperless posts come into play. A bill payment solution like PayMaker by FNBO protects your banking information. Someone can approve a payment without ever accessing the online bank account. The system allows for user-based permissions, which means employees can only see what they need to see. And they rarely—if ever—need to have direct access to your bank account.
You have multiple practices and tools at your fingertips to prevent fraud. Including:
No business is safe from fraud. It’s time to understand the risks and take action.
Learn how PayMaker by FNBO can protect your business from fraud or sign up today.
About the Author
Jason Hagan leads Wholesale payments strategy and product development for First National Bank of Omaha. He joined the bank in 2013 to develop and implement the bank’s payments and partnership strategy. Jason also leads the Wholesale Bank Investment process.