As your business begins to accept more types of electronic payment methods including gift cards, pre-funded cards, delivery service credits and mobile payment apps, it becomes increasingly important to protect your bank accounts from electronic fraud.
One way to protect your accounts from electronic fraud is to use your bank’s ACH Blocks or Filters service. This service provides an added layer of security to safeguard your account by automatically filtering or blocking unauthorized ACH transactions. You can choose to block all incoming debits with ACH Blocks or your can provide the bank with a list of authorized debits and credits by using an ACH Filter.
In addition, it is important to reconcile your business bank accounts on a regular basis to ensure your deposits and withdrawals match your bank records. This should be a best practice in every business and businesses with heavy cash and ACH deposit volumes should reconcile daily. Those with lower volumes should reconcile their accounts at a minimum of once a month. A regular review of your accounts can help identify issues before they become bigger problems.
READ MORE: Improve Your Business’s Cash Management Through Financial Statement Reconciliation
Another great reason to reconcile all your business accounts is to catch fraudulent transactions. You should be checking to ensure that all the check activities are legitimate checks that you have issued in the correct amount and to the proper payee. You should also be comparing deposited amounts to your sales/POS system. And always verify that all electronic debits and debits are from authorized vendors and in the correct amount.
A tip to remember is that business accounts are not as well protected by federal law as consumer accounts are. Therefore it is very important that you reconcile your accounts on a regular basis and immediately report any discrepancies or issues to your bank to insure you have discovered and reported the issue in a timely fashion.
Prevention is the best practice in regards to bank account fraud. If you have not had a deposit account review with your bank lately, now is a good time to reach out to your banker and ask them to do an account review and share their best practice solutions for account fraud services.
READ MORE: 10 Tips to Avoid Identify Theft and Credit Card Fraud
This is one more way to ensure an independent set of eyes is reviewing and monitoring your depository accounts – your accounting firm also can provide back office services and account reconciliation services for your business. Contact us for more information.
