How to Protect Your Business Cash Flow

BY: Sam Huntington

When we speak to business clients about optimizing their payment processes, Automated Clearing House (ACH) payments are usually at the top of our list of recommendations for security and efficiency, allowing users to speed up collections, improve cash flow, and take advantage of trade discounts through superior payment velocity.

However, even as the adoption of ACH payments accelerated during the pandemic, paper checks continue to be the most popular method of payment for business transactions in the United States.

Check fraud is also the most popular way for criminals to steal money from a deposit account. It accounts for more losses than any other type of payment method for a variety of reasons, including:

  • Even if you employ effective security measures at your place of business, as soon as a check leaves your premises, you have little control over where it goes. Checks are accessible in unsecured mailboxes and at multiple points in the payment process before they are negotiated at the receiving bank. 
  • Check fraud is relatively low-tech. It is not overly difficult to change information on a paper check or to create a counterfeit check.
  • Anyone who sees your check has your business name, address, bank routing number, account number, check sequence number, as well as the authorized signer and how they sign their name. 
  • Business accounts have a much shorter window of time to alert the bank of possible fraud than consumer accounts.

Fortunately, State Bank of Cross Plains has an easy solution to greatly reduce the opportunity for check fraud from your business deposit account: Positive Pay

Positive Pay is an image-based fraud prevention service which compares checks presented for payment against ones that you tell us are authorized. Think of it as the reverse of a stop payment order. When you place a stop payment, you’re telling us about a check you don’t want us to pay, and with positive pay, you give us a list of checks you do want us to honor. 

If anything about the check presented to us does not match your list, it’s flagged for your review. You can see an image of the check on our secure website, and if the check is unauthorized, you can reject it and we’ll return the check to the issuing bank. In addition to account number and amount, Positive Pay uses optical character recognition software to read the payee line to guard against someone altering the recipient of the check. Positive Pay is a convenient way to gain peace of mind and added security by reducing your exposure to check fraud. 

Judging by the number of fraudulent checks Positive Pay has identified this year, check fraud shows no sign of diminishing. For more information about our Treasury Management services or to schedule a meeting to discuss these options, please contact me at (608) 826-3516.


Sam Huntington

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