Locked From the Inside: Protecting Your Electronic Payments
- Friday, March 8, 2019
Electronic payments to vendors are easier and faster than printing and signing hundreds of checks, but what are you risking for convenience? As more and more payments become electronic, wise businesses will take steps to protect their bank accounts.
Accounts payable (A/P) errors are sometimes big and obvious. But more often, money seeps out in small amounts, month after month, to a vendor who long ago stopped supplying your business. Or worse, you discover your company has been paying a fraudulent vendor created by your own long-time employee.
Stop Mispayments at the Source
The best protection starts with your ERP — specifically, setting up effective processes to monitor your vendor database as well as electronic payment mechanisms.
How do you create those processes? To be most effective, start at the source — your list of vendors — and work through to payments and then follow-through. A sample step-by-step process is shown below, followed by key points to remember at each stage.
Setting up and maintaining the vendor list
Utilizing Positive Pay and other dual controls over payments
Review the Active Vendor Listing
Periodic data analytics
Maintain Strong Controls, Beginning to End
The strongest banking and vendor controls in the world won’t protect your bank account if you don’t also practice basic internal controls: segregation of duties, consistent invoice review and approval, strong user access controls, and regular vendor maintenance.
As more and more payments become electronic, wise businesses will take steps to protect their bank accounts. Simple but consistent controls like these can help protect your business from fraud or from innocent but costly mistakes. It’s worth a little time and expense to make sure your funds are protected.