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6 ways to better secure your business’ finances

Home Blog6 ways to better secure your business’ finances

Key takeaways:

  • Small businesses can be easy targets for fraud, but by taking precautions, you can minimize your risk.
  • Banking programs that monitor your business transactions can help you catch any fraudulent activities sooner.
  • Setting up systems that help you actively check your finances could alert you of any suspicious activity.  

As a business owner, you know you’re at risk for fraud. For small businesses, this can be an even larger concern. According to the Association of Certified Fraud Examiners, businesses with less than 100 employees lost almost twice as much money per scheme as businesses with more than 100 employees.

The sad reality is that fraudsters often target smaller businesses because they do not have the technology and practices in mitigate the risk of prevent fraud. The good news is that there are many tools available to help. By taking strategic precautions, you can reduce risk and improve the speed in which you receive information associated with fraud.  Here are our tips:

  1. Utilize ACH Manager. If your business is making lots of transactions or has multiple locations, consider ACH Services. This secure system enables direct deposit of payroll, batch transactions and business mobile banking access. Utilizing technology such as ACH Manager allows you to control who has access to payments while paper checks are accessible to anyone who can access the physical checks. Additionally, many banks use fraud detection systems to identify and prevent transactions that are outside of the norm.
  2. Install a system of checks and balances. At small businesses with fewer employees, it’s not uncommon for one person to control all the finances. Unfortunately, that one person could then easily write checks that defraud your business out of precious dollars. To prevent this, establish a system that holds multiple employees accountable for the finances. Even something as simple as having someone proactively review your books monthly could prevent issues in the future.
  3. Don’t take it all on alone. As a small business owner, it can be tempting to handle everything on your own. This leads to problems. Whether you like it or not, one area will start to fail due to a lack of attention. If finances aren’t your cup of tea, consider hiring a certified accountant. Just be sure to conduct proper background checks on that person, so you know you have a straight-ace to help you. Once that person is in place, be sure to keep an eye on his/her work.
  4. Safeguard your checks. Check fraud is another way your business could potentially lose money. With Positive Pay, details of the checks you issue are analyzed to prevent altered or forged checks from being processed.  Additionally, Positive Pay reinforces your audit trail and simplifies account reconciliation.
  5. Monitor your accounts. With today’s technology, you have a plethora of information at your fingertips. This includes your business’ financial information. Use the real-time alert feature in your online banking platform to stay in-the-know about your accounts. As a best practice, monitor your account activity daily.
  6. Stay vigilant. Understanding that your small business may be a target for scammers is the first step to preventing it. Educate yourself and your employees on common phishing schemes and ways to keep your private business information safe. This includes using strong passwords, choosing two-step authentication systems, regularly updating security programs and installing malware protection and anti-virus software.

By spending some extra time setting up your business’ finances, monitoring your accounts and utilizing technology systems, you can help protect your business. If you have questions about the security of your business’ finances, visit your local MidWestOne branch.

MidWestOne Bank does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.