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by Lauren Hess
October 28, 2020
by Lauren Hess
October 28, 2020
Every business owner wants to know their business is protected. These days, that’s no small feat. Luckily, your bank offers some basic tools, like positive pay, to help keep your business safe. Now, how do you ensure you understand this tool and its variations? We’ve got you covered.
Simply put, positive pay is a feature that ensures that no one can fraudulently create a check or alter a check, clear the bank, and leave you out money. Positive pay detects fraud before the money ever leaves your account.
Well, it’s a matching game. Positive pay compares the check register uploaded by the business to what is presented to the bank. The feature cross references payee name, date, dollar amount, and check number for accuracy against the business’ submitted register. If there’s a discrepancy, the bank holds the check and notifies the business owner for verification. Positive pay does have a cutoff time each day a check is held for verification, so make sure you set up text and email alerts so you don’t miss the deadline.
It is possible to have positive pay without payee name verification, but having the feature with name verification provides an added element of security. If this is a feature your business has used for some time, it’s always good to double check that you are taking advantage of positive pay with payee name verification. It’s a simple detail that makes a big difference!
Now, let’s talk about reverse positive pay. A variation on the original, this feature offers the benefits of positive pay, without the manual upload from you. Instead of uploading your business’ check register, the bank simply provides all the checks that have cleared at the end of each day. There’s a daily decision deadline for this service too, so make sure those text and email alerts are turned on!
If you are writing ten checks a year, or even ten checks a month, reverse positive pay is a match made. If you’re writing 100 checks per month, not so much. Even if you’re not too keen on the manual upload, positive pay is probably the right option for you. Remember that with reverse positive pay, you’re reviewing every single check, not just those that are flagged.
If your business is truly managing that much volume, talk to your treasury management professional. There might be other, more advanced tools to take advantage of.
We’ve got a suggestion there, too. Take advantage of a Post No Check service. This feature is ideal for businesses that rely on electronic payments, like ACH or wires, where no one off checks are being written on the account. The post no checks status prevents anyone from creating fraudulent check stock and writing checks against your account.
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