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#FraudAwarenessWeek: The 7 Best Practices for Payment Fraud Prevention

Do you know that companies lose an estimated 5% of their revenue annually due to fraud, according to the 2016 ACFE Report to the Nations?

We don't want you to be one of them.

Your payment system should have multiple levels of security, especially when used for issuing ACH (Automated Clearing House) payments. Fraud prevention along with fraud detection strategies embedded in your payment platform and processes should hinder the capability of a "lone wolf attack." In days gone by, companies might have been compelled to use a single computer in a room with closed circuit TVs to protect the business files.

Today there should still be levels of access built into your system and for your team to follow, and in honor of International Fraud Awareness Week, here are the seven best practices for payment fraud prevention:

Payment Fraud Prevention - Accounts Payable Fraud Prevention - AP Fraud Prevention

1. Positive Pay- Use this tool when issuing check payments to create a file that ensures your bank only accepts checks that match check numbers, dates, dollar amounts and the payees. 

2. Separation of Duties- Critical for larger departments, but very effective in any business setting. Don't allow one person too much control over issuing payments...instead, have one person input payments, another approve (see next) and a third actually issue payments to resolve many security concerns. 

3. Multiple Levels of Approval- Don't depend on one person approve transactions.  Better -- have approvals go through multiple levels, especially if for a very large transaction. If necessary even demand a hand signature for very high dollar check payments. 

4. Secure Data Transmission- Ensure that your payment system will securely transfer data over the network and directly to your financial institution or your off-site check print and mail facility with SFTP (SSH File Transfer Protocol, or Secure File Transfer Protocol ) and the highest security encryption standards.   

5. Audit Trail Reporting- This practice is nothing more than an electronic "paper trail."  An AP manager should be able to go behind employees to see who's creating, approving, issuing and even cashing items. This is a good practice not only for mitigating security concerns, but for also satisfing auditing requirements. 

6. Employees Take Vacation- Everyone should want a break from work sometimes.  If you have an employee or group of employees that never want to take vacation, be mindful...they may have an hidden agenda. 

7. Always Investigate Email Urgent Requests for Payment- Advise your team that under no circumstances should an URGENT request for a payment be issued without several levels of investigation and authorization.  Even when the request appears to be from the CEO, all payments are issued following the protocols recommended above.  

These all important tips secure the safety of your payments process and your organization.  Especially these days when we hear and read more and more stories about security issues, the time to ensure your secure payments process is now.  If you are not able to follow these practices due to limitations within your systems, then by all means look for alternatives. 

In fact, OnPay Solutions offers products and services that will secure your business to business payment transactions.  We also happily consult with companies to help them find best practices for their unique situations.

Learn More About Payment Fraud Prevention  

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