'Tis the season to safeguard your business banking accounts
Published on: November 17, 2017
Guest Column, Ean Colley, Memphis Business Journal
This time of year, the Benjamin Franklin axiom, “An ounce of prevention is worth a pound of cure,” rings especially true for businesses of all sizes.
Sometimes, however, there is not a cure — and such is the case with business debit cards. As debit and credit cards continue to become the primary preferred method for transactions, it is worth pausing and reacquainting yourself with the nuanced differences between them.
While card issuers actively monitor and manage liability and fraud protection for their cards, it is imperative for businesses to understand that debit cards are tied to your deposit account (your money) not a line of credit (issuer’s money). If you use a debit card for business purchases, you may be responsible for any unauthorized purchases on that card, and your checking account will take the hit.
The next two months will bring record-breaking card transaction numbers for both businesses and consumers. The opportunity for fraud at all levels could be prevalent.
Trusting your employees to purchase goods and services for the company is a valuable asset to your growth. But, not arming employees with the tools to prevent “crimes of opportunity” could lead to unexpected financial losses.
There are ways to exhibit trust while also promoting fiduciary responsibility. Today’s technology is both efficient and effective for company- and consumer-account monitoring, but it requires extra steps on the front end and diligence. Take the time to work with your banking specialist to set some or all of the following parameters, which will yield a positive return:
Limits. Set limits on your employees’ transactions with business debit cards. You have the freedom to keep an ongoing limit at $100, for example, but also have the flexibility to contact your deposit specialist to allow emergency limit raises, such as for the company holiday party or a last-minute client gift.
Notifications. Transactions at any level can generate notifications to your mobile device or email.
ATMs. Access can be restricted for employees, if needed.
Monitoring. Watch your checking accounts regularly for unusual transactions, and notify your bank immediately if you notice anything unusual. Also, note that your bank or card issuer would and should never contact you requesting the business card’s confidential, three-digit security code or PIN.
If you do get contacted for that information, reach out to your banking specialist and verify the request before disclosing any information.
Fraud is a crime of opportunity. Limiting that opportunity is not a reflection on others but rather an indication of the good stewardship of your business and your employees.