Are you still using paper checks to pay vendors? If so, you’re taking a big risk with your security.
Thieves who get hold of one of your checks can do more than just cash it and pocket the funds; they also have your account number and routing number. With that information in hand, they can easily print counterfeit checks in your name or make online purchases with your money.
If you’re not one of those people who look at your account balance every day, it could be a long time before you realize what’s happened. And your bank may or may not be able to get the money back.
Fortunately, there is a simple yet effective service called Positive Pay that can help business owners prevent such check fraud before it happens. Yet many businesses neglect using this service until it’s too late.
Here’s how Positive Pay works. Each day, you tell your bank which checks you’ve issued. As those checks are presented for payment, your bank reconciles the information you’ve entered and makes sure everything matches. If it does, the bank pays the check. If it doesn’t, an exception is created and the bank lets you know about it. You can then go online and determine whether or not you want to pay the check.
It takes just a few minutes a day and costs a fraction of what you might lose to fraud.
Positive Pay is just one way that the age of internet banking has made life easier and money safer for business owners. Yet for so many businesses, banking services exist that remain a mystery. Here’s a guide to some of the most common online business-banking options.
1. Information Reporting
The cornerstone to your online business banking, information reporting makes access to your account and its entire history from your computer and mobile devices easy. Anything related to your account is available: copies of checks, deposit tickets, what’s coming into your account tonight, any debits that are posting.
With this (usually) free basic service, you can also manage your checks, transfer funds between your accounts, and check the status of any commercial loans you have through the bank.
2. Automated Clearing House (ACH)
This network for financial transactions makes electronically transferring funds between banks a breeze. With ACH, you can instruct the bank to pay a certain amount of money to a vendor, an insurance company, or your employees on a regular basis. You’ll be able to view these “standing orders” and then change or cancel them as needed.
Using ACH will save you time and make it easier to track funds transfers. It’s not for everyone, but most businesses who have employees, or who make a significant number of regular large payments should consider it.
3. Bill Pay
For smaller onetime payments, look to Bill Pay services, which are usually free with basic online business banking. Using Bill Pay rather than cutting a physical check has several advantages. It’s quicker and almost fraud-proof, and you can set the day you want the bill to be paid. And don’t worry if the entity you’re paying doesn’t accept online payments. If they’re not in the network, your bank will cut them a check – you don’t need to do anything else.
4. Wire Transfer
The business world has operated at “real time” speed for some time now. As such, you’re likely to find yourself needing to make real-time payments frequently. In these instances, Wire Transfer is your best bet. You can use it to set up a onetime payment or regular payments. And it provides the convenience of initiating transfers from your office rather than making a trip to the branch.
5. Remote Deposit
Depositing your checks at the closest branch probably sounds easy… until it isn’t. And think about this. It may take an hour to drive to a branch and then back to the office or to home. It takes 30 seconds to scan a check at your desk and another minute to deposit it remotely.
Talk It Over
The most important thing to remember when it comes to making the most of your online banking is to leverage the advice of your banker. I’ve noticed that many business owners may know the services available but may not understand them or think they are only for larger companies. While it can be said that certain services are better for some kinds of businesses more than others, the core business banking services will help businesses of any size. However, I’ve seen many businesses that pay for services they have little use for, while ignoring those they could benefit from. The irony of making the most of your online business banking services is that it requires that occasional live conversation with a trusted advisor. For a conversation about what’s right for your business, let’s talk.