This seems to come in waves. Last year at this time, and this year too, more and more clients are experiencing bank fraud. Checks are presented against their accounts and cashed. In many cases, our clients lose a lot of time, but they were not responsible for the stolen funds. We have a couple of things to share on this topic.
In one case, our client left checks in the mailbox for the carrier to pick up when they drop off the mail; lots of us do this. The checks were taken, the name replaced, and the thieves cashed the checks themselves.
You’ve probably heard of Positive Pay. Your banker may have even asked you to consider implementing it. Basically, you provide the bank with a list of checks that you’ve cut—date, payee, dollar amount. These are uploaded on the bank site in a specific format. From there, the bank matches all those details to the checks that are presented. If anything doesn’t match, they reject the check.
Yes, it’s one more step after a check run, and this would include all checks you issue including Payroll checks. The amount of time to create the file and upload it to the bank is a small fraction of the hours and aggravation you’ll go through when there’s fraud. One of our clients had to setup a new checking account, which was subsequently compromised! The whole nightmare started over again.
There’s also an option called Reverse Positive Pay. In this case, only checks above a specific dollar amount have to be reported. Unfortunately, the thieves know about this option, so one of our clients was shocked to find about 40 checks had cleared the bank, all for under the $100 limit, all fraudulent!
For our Sage 100 Contractor clients, we have a Positive Pay program that is fully integrated with S100C and provides the file you upload to the bank. Our templates work with most banks, and since it’s our tool, we’re able to make changes to meet bank-specific criteria.
Check with your bank to see if your business accounts include Positive Pay, or if there is a charge to use this feature. We strongly recommend implementing this safeguard. It will save you much heartache and lost time. Don’t be surprised if banks start insisting on Positive Pay; this is expensive for them, too! –CMW