With the recent attention that cybercrimes have received in the media, it’s hard not to think about the risk to your (and your business’) security and privacy every time you swipe your card or order something by phone or online. Here are four suggestions that may help you sleep a little better.
- If you use debit cards, research how much protection you have from unauthorized transactions. For example, major credit cards limit the amount you must pay if your card is used without your authorization. However, debit cards do not offer similar protection; once the money has been withdrawn from your account, you may be stuck with the entire loss. As long as you have the self-control to pay credit cards in full each month, you may be safer using credit cards.
- Setting up auto debits is convenient. You don’t have to remember to make a monthly payment and you can easily budget for the cost. However, monitor your banking activity to be sure that these payments are being withdrawn correctly. One case of fraud was caught when the owner discovered that the bookkeeper set up an auto debit for both the business account as well as her personal utility accounts. Another bookkeeper accidentally set up an auto debit to be withdrawn from her boss’s personal account instead of the business account, then panicked and shut it down, causing the vendors' bills to be unpaid. Review your banking activity on a regular basis by accessing your account online at least twice a week and comparing with the transactions listed in your accounting software.
- Consider creating a separate checking account for use with debit cards and auto debits. Keep a minimum amount in this account: only enough to cover anticipated purchases. Just remember to transfer sufficient funds to cover anticipated charges. Discuss options with your bank, such as creating a maximum daily withdrawal amount. If the account is hacked, at least you won’t lose much.
- Reconcile your bank statement as soon as you receive it, without fail! Look for unusual activity, duplicate payments, unfamiliar names on debit transactions, and if your statement includes check images, be sure that the name on the cashed check is the same as the name recorded in your accounting software.
It’s frustrating to add fear of crime to the list of topics to keep contractors awake at night, but putting in place a few simple controls may help.