Employee looks over analytics on desktop
Employee looks over analytics on desktop

Strategies for Your Business to Combat Financial Fraud and Enhance Security

Scams are gradually becoming more sophisticated. Clear, proactive measures are essential to safeguard against fraud attempts. Implement these strategies to stop fraud in its tracks.

1. Reconcile all bank accounts regularly – in some instances, daily.

If a company is charged by ACH (of certain ACH SEC codes), the business receiving the charge has only 24-hours to dispute fraud. The financial loss that is not reported within that 24-hour window can then fall on the company’s shoulders. Hence, it is essential that your company reconcile your bank accounts regularly to review for fraudulent activity.

In the instance of staff absences, proactive measures such as cross-training backup personnel can prevent a delay in reconciliation processes. Be cognizant of long holiday weekends and other calendar-related factors, as well.

Any irregularities in reconciliation should be escalated within the company and to the bank within 24 hours. Additionally, consider fraud detection services like Check Positive Pay to enhance security.

2. When possible, take all mailed payments to the post office.

Many scams occur through the theft of content within standalone blue mailboxes. Hand delivering mailed payments to the post office will significantly reduce theft and fraud.

Even though you may not pay in cash, sensitive information like account numbers could be at risk when mailing payments by check. Best practice recommends that you prioritize paying with Corporate Card first and electronic payment (ACH) second. Not only will you reduce the cost of paying by check, you minimize the opportunity for fraud.

3. When possible, opt to use a company credit card for vendor payments.

The more a physical check is passed around, the more that your company’s name, logo, account number, and bank routing number are seen – everything the criminal needs to replicate your checks.

Beyond fraud prevention, there are numerous benefits to using a credit card to pay vendors. Benefits can include speed of payment, improved payment terms and extending the working capital cycle throughout each month. Depending on the company’s card spend, a material rebate can be applied as a credit. In addition, you can improve reconciliation efforts by assigning a unique virtual card number per vendor.

Credit card benefits can include speed of payment, improved payment terms and extending the working capital cycle throughout each month.

4. If payment instructions change, implement dual control procedures.

Vendors may naturally update account numbers from time to time, presenting an opportunity for scammers. In these scams, “The Bad Actor” can send your finance team an email, impersonating the vendor you pay on a regular basis. It is essential that each company have a plan in place to validate the change in payment detail.

Reach out to the vendor directly by calling a trusted number. Establish dual control within your staff. Assign one employee to contact vendors and validate changes, while a second handles the data entry. This helps validate payments and ensure there are multiple eyes on the lookout for fraud.

5. Consider a dedicated treasury workstation.

Business Email Compromise (BEC) poses a significant threat to organizations worldwide. To mitigate this risk, consider implementing a dedicated computer for accessing your bank’s online portal. By restricting the ways to access your information, you can dramatically reduce your risk of an employee accidently clicking on a suspicious email or link.

Having a single computer for access was a common practice years ago but fell by the side as convenience reigned. Now, with the resurgence of fraud, many companies are revisiting this strategy.

Looking to increase cybersecurity when managing financial data? Check out our Fraud Prevention Solutions and contact your Treasury Management Officer to discuss what measures you can take to prevent cyber fraud from happening to your organization.