You have most likely heard IRS warnings against tax fraud, or been cautioned numerous times about the dangers of identity theft. But what about your business? Not only must we be aware of fraud attempts against personal property and assets, but we must also take measures to protect our small businesses against payment fraud.
Payment fraud has been on the rise lately. The Association for Financial Professionals conducted a survey of 625 payment professionals on Payment Fraud and Control in the year 2013. Their findings were significant: 61% of these businesses/organizations were victims of attempted or successful payment fraud in 2013. The typical financial loss from payment fraud was $20,300. If you’re a small business like me, you calculate costs carefully in order to keep your business afloat. A loss to a small business amounting in thousands of dollars would be staggering!
Of the 61% who were targeted, 87% reported check fraud, 27% cited electronic check (ACH) debit fraud, and 8% experienced ACH credit fraud. It is important to note that small businesses do not have the same legislative protection that consumers enjoy. Instead, businesses must rely on banking or payment processing services to spot and stop unauthorized activity on their accounts, services which usually cost additional fees. Businesses should not rely solely on banking services to protect them, because their bank information still changes hands from internal employees to external companies as payments are processed. Banking services are valuable, but should also be combined with other security measures.
Here at Affordable Bookkeeping and Payroll, we use a billing service to avoid that last unnecessary information exchange. By using such software, sensitive bank information is never given to clients or vendors, keeping us safer from fraud. It is vital for all of us to take measures to avoid losses due to fraud, whether by accidental leaks or prying eyes. If you are interested in outsourcing your accounts payable process to prevent employee fraud, call us to discuss. 310-534-5577 or [email protected]
View the survey results here: 2013 AFP Payments Fraud Survey
