Business succession is the one thing many companies fail to address for fear of relinquishing control, a lack of time, the feeling that successors aren’t ready or other reasons. But, it’s never too early to start succession planning.

“Statistically, roughly only 30 percent of family-owned businesses are effectively transferred to the second generation and just 10 percent make it to the third generation,” says Julianne Cruz, managing director of Advisory Services at CB&T Wealth Management. “There are myriad reasons for this, but one recurring issue is a lack of effective succession planning.”

Smart Business spoke with Cruz about how to effectively position your chosen successors for success.

How should business owners get started?

You need to consider the three ‘T’s of successful transition:

  • Transferring management.
  • Transferring ownership.
  • Tax consequences.

In all cases, having a plan that is strategic and well executed is key, but that takes time. The most successful transition plans take place over a number of years, as successors develop the skill sets required to run the business. 

How is management transferred?

It’s important to select an independent adviser who is highly experienced with planning issues to arrive at the best plan for you and the next generation. Some areas to consider are: If more than one child is involved in the business, how will contentious decisions be made once you exit the business? If you want certain key, loyal employees to be cared for, as they are likely necessary for a smooth transition, what assurances do you have this will happen? What happens if unexpected health issues force the transition early?

A well-developed plan 
ensures the business will thrive without interruptions, helps the next generation grow into their role at a reasonable pace and promotes future harmony among family members. A short-term plan ensures there’s enough liquidity and insurance to hire necessary experts and avoid a fire sale. A mid-term plan must prepare developing successors or key employees to be in decision-making roles initially.

It also would have a timeline for family members to step into 
their new roles with certain targets. The long-term plan is ultimately what you want to happen — the best of all circumstances. After discussing your plan with advisers and successors, involve your key employees, who may be more satisfied knowing the company’s future.  

What are some factors to consider with transferring ownership?

Once the management transition plan is established, plans for transferring ownership can occur. Usually this begins with your retirement plans. How much income will be needed and what’s the timeline? If you need cash from the business, are you willing to bear the ‘investment risk’ of he business as a source of income once you’re not involved? Then, consider estate-planning issues. Are all your children involved in the business? If not, do you desire to ensure each child will ultimately receive an equal estate share? 

How do tax consequences factor in? 

Taxes are the tertiary consideration once decisions have been made regarding the general retirement and estate plans. As is the case with investment portfolios, taxes should never drive the decision-making process. Tax-reduction strategies should only be considered after other issues are decided. Business owners in general, and particularly family-business owners, should begin now and get an experienced, independent adviser to guide them through the process. The earlier you plan, the better the results. Sound, experienced advice will make the process that much easier, and maybe even bring family members closer. 

Wealth management services are offered through Contango Capital Advisors, Inc. (Contango), which operates as CB&T Wealth Management in California. Contango is a registered investment adviser, a nonbank affiliate of California Bank & Trust and a nonbank subsidiary of Zions Bancorporation. Some representatives of CB&T Wealth Management are also registered representatives of Zions Direct, which is a member of FINRA/SIPC and a nonbank subsidiary of Zions Bank. Employees of Contango are shared employees of Zions Trust, a subsidiary of Zions Bank and an affiliate of Contango. #CCA0813-0090 

Julianne Cruz is Managing Director, Advisory Services, for CB&T Wealth Management. Reach her at (310) 258-9301 or julianne.cruz@contangoadvisors.com

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Small business owners still remain concerned about access to capital and making sure that they have access to the best solutions for improving their cash flow and finances.

So what specific financial solutions can truly help small businesses throughout the state grow and prosper?

Smart Business spoke with California Bank & Trust Executive Vice President Betty Rengifo Uribe about ways small business owners can leverage some helpful financial solutions to save money and streamline operations.

What specific types of financial solutions should small business owners be considering right now?

There are several different solutions that many business owners can use to improve their finances.

Since access to capital is still a critical issue for many small business owners, entrepreneurs should consider a wide range of solutions, including loans, lines of credit, leases and, perhaps most importantly, Small Business Administration (SBA) loans that may offer very favorable rates and terms.

Beyond that, any solution that can help grow revenues and streamline operations is worth a further look. Some of the most useful include: merchant services, business credit cards and remote deposit.

How can small businesses use merchant services to their best advantage?

Any business, large or small, should be offering customers as many payment options as possible. With the right merchant services solutions and technology, you can accept credit cards, debit cards and even gift cards.

What’s your advice for using business credit cards?

One of the best cases for using a business credit card is that it allows you to keep your business expenses completely separate from your personal expenses. With many cards, you will receive detailed reports of expenses that are already sorted by categories. That can make it a lot easier for both you and your accountant during tax season — saving time and resources.

Many small business owners have cards issued to employees. You have to be careful and monitor spending, but imagine how much easier it is for employees to pay their expenses with a credit card instead of dealing with the tedious paperwork of requesting reimbursement checks. This allows your employees more time to focus on their core job responsibilities.

Additionally, you get the usual benefits of credit cards, such as various rewards programs, a credit line that you’re able to access and protection against fraud for purchases made with the card.

What is remote deposit, and how does it help small business owners?

Business owners and their employees need to make the best use of their time. One way to do that is to avoid frequent trips to the bank to make deposits.

With remote deposit, you can deposit checks right from your office. You simply scan checks and they’re automatically deposited into your account. That means you can make deposits anytime — on weekends or in the evening — which can give you an extended deposit window for crediting funds to your account.

Remote deposit also allows you to store images of checks electronically so there’s no need to store physical copies of deposited items.

What do you say to business owners who don’t see value in solutions like these?

Time and time again these solutions and others really move the needle in terms of streamlining operations and enhancing revenue opportunities. Not every solution fits every business, of course, but with a wide range of choices, your business banker can help you customize solutions that address your goals and add more value to your business.

Betty Rengifo Uribe is executive vice president at California Bank & Trust.

Website: Helpful resources for small businesses.

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International expansion is a great way to grow as the U.S. economy slowly recovers, and the population and per capita gross domestic product of countries such as India and China continue to rise. But finding funding for exports can be difficult, unless you leverage a government-backed program.

“Why turn away sales when you can get working capital assistance through government programs to penetrate red hot foreign markets?” says Alfred Ho, vice president and enhanced credit specialist at California Bank & Trust.

Smart Business spoke with Ho about the benefits of leveraging guaranteed export financing.

What is the working capital guarantee program?

U.S. manufacturers were struggling to compete overseas, as foreign sales and receivables are generally excluded from traditional lending programs. So, to spur exports and domestic hiring, the federal government offers guaranteed financing programs administered by the Small Business Administration (SBA) and the Export-Import Bank of the United States (Ex-Im Bank).

The loan proceeds under these programs can be used to purchase supplies and equipment, hire staff or, in the case of the SBA’s Export Express program, even attend an overseas trade show. And because the terms are flexible, owners can use the loan proceeds to fulfill a large contract or several small deals.

How do the programs help small businesses?

The programs encourage banks to lend to small businesses by guaranteeing 90 percent of the loan amount and allow loan officers to consider foreign receivables and work-in-progress during the underwriting process.

Plus, if a standby letter of credit is required to support a bid bond, advance payment guarantee or performance bond, the collateral requirement to have one issued is only 25 percent, instead of the 100 percent in traditional cases. This provides an edge for a U.S. company in its quest for overseas contracts.

How much can companies borrow and what does it cost?

The SBA export working capital program permits loans below $5 million. It charges an upfront fee of 0.25 percent of the loan amount and an annual utilization fee of 0.55 percent, which is assessed monthly.

There’s no limit to how much you can borrow from Ex-Im Bank, and its upfront fees range from 1 to 1.5 percent of the loan amount. The loan interest rate is based on the prime lending rate plus a spread. Interest rates for larger loans are based on the London Interbank Offered Rate,

which is currently hovering around a 52-week low.

What are the eligibility requirements?

Requirements differ among the programs but they all require a firm purchase order prior to advance and, minimally, shipment from a U.S. port to a country acceptable to Ex-Im Bank. Goods and services shipped must have at least 51 percent U.S. contents. Certain products are excluded from the programs. A company must also have a positive net worth and be profitable for the last three years to qualify.

For other qualifications and restrictions, talk to your lender or visit the SBA or Ex-Im Bank websites.

How can business owners find a participating lender?

Your local SBA or Ex-Im representative can provide referrals, but you can look for a Delegated Authority Lender who has the ability to expedite your loan.

Your banker can walk you through the lending process and share helpful ideas. The banker should be able to suggest ways to lower the risk of international commerce.

The important thing is: Don’t venture into the international marketplace alone. Find a competent banker to serve as your guide.

Alfred Ho is vice president, enhanced credit specialist at California Bank & Trust. Reach him at (213) 593-2118 or alfred.ho@calbt.com.

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Published in Los Angeles

The recent uptick in sales is like a breath of fresh air for beleaguered business owners — unless they don’t have enough cash to meet rising expenses while they wait out a typical invoicing cycle.

A conventional line of credit may seem like the prefect solution, but since an owner’s personal and business finances are intertwined, those who fell behind on mortgage payments or bills during the recession may not qualify.

“Owners need short-term funding to carry receivables and hire staff now that the economy is improving,” says Paul Herman, small business lending manager at California Bank & Trust. “Their best bet is a short-term line of credit (SLC) since bankers primarily focus on a company’s cash flow cycle during the underwriting process.”

Smart Business spoke with Herman about the opportunities to grow your business by tapping a short-term line of credit.

What is an SLC and when are they advantageous?

Essentially, an SLC is bridge financing. Savvy executives tap the line to pay expenses between the time revenue is generated and receivables are collected. For example, they may need cash to purchase supplies or inventory to handle seasonal spikes or new contracts before the goods are finished, delivered and paid for. Contractors frequently use an SLC to pay bonding and insurance premiums so they can bid on new projects, and veteran attorneys and doctors often use the funds for operating expenses when they launch a new practice.

You can draw on the line as needed and repay the funds at will as long as you meet the terms of your agreement and attend periodic reviews with your bank.

How does an SLC differ from other loans?

It’s assumed that owners will pay down a short-term line as cash is received, so bankers are primarily concerned with how quickly a company converts receivables into cash when they consider an SLC request.

Long-term debt is typically used to purchase equipment, buildings or other fixed assets, so bankers must consider depreciation as well as a company’s profitability to assess its ability to service the loan. In fact, stable but slow growth is often a key indicator of a company’s ability to service debt over the long term, while an SLC is the perfect solution for cash flow shortages resulting from a growth spurt.

Are there risks associated with an SLC?

No loan is risk free. However, prudent owners can avoid default or cash shortfalls by following these best practices:

  • Accurate forecasting — Some owners are so afraid of taking on debt that they run out of cash because they don’t ask for a large enough line. This won’t happen if you accurately forecast your company’s growth and cash conversion cycle. In fact, it’s better to ask for the maximum limit since you have the option of drawing the funds as needed.

  • Be disciplined — Only use the funds to close short-term cash flow gaps. Otherwise, you may run out of money and have to liquidate assets to pay bills or meet payroll.

  • Be responsible — Bad debt, delinquent customers or risky business practices can leave well-intentioned owners holding the bag. Are you ready, willing and able to accept responsibility for managing your company’s credit, cash flow and an unmonitored credit line?

How can a business maintain the quality of its assets and increase borrowing capacity?

Owners often emphasize sales, but what good is top-line growth if the margins are bad or you can’t collect your hard-earned money? Even tenured customers may encounter a cash crunch as the economy rebounds, especially if they wait too long to secure short-term financing. Be disciplined about verifying a customer’s credit worthiness, keep an eye on receivables and don’t forget to make timely collections calls.

Finally, don’t ignore your balance sheet because a business can’t survive with high debt and little equity. Grow assets as well as revenue, and make sure your balance sheet reflects the norms for your industry.

What do bankers consider when evaluating a request for an SLC?

In addition to reviewing traditional underwriting criteria like business and personal credit scores, bankers want to know whether you have the means and ability to manage and repay a line of credit.

They’ll look at your industry experience, the viability and diversification of your customer base, along with the ebb and flow of your company’s cash flow during previous cycles. Will your customers pay on time? Can your business survive if one customer defaults? Do you have enough personal assets or sources of secondary support to pay your bills while you wait for an invoicing cycle to conclude?

Bankers may be able to use government guarantees to overcome minor risks, and you could qualify for a conventional line of credit down the road if you use an SLC as a stepping stone to build your credit score and your company.

Member FDIC

Paul Herman is the small business lending manager at  California Bank & Trust. Reach him at Paul.Herman@calbt.com.

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Published in Los Angeles

Is cash more important than profits? It actually may be, as profitable companies fail every year simply because owners don’t have enough cash to pay their bills.

The problem is so pervasive that the U.S. Small Business Administration cites insufficient capital as the No. 2 reason that small businesses fail. And insufficient cash flow may keep owners from making advantageous hires or acquisitions, or even from receiving a paycheck.

“It’s easy to lose track of cash when you are under stress and juggling multiple responsibilities,” says Pamela Glass, project manager and mobile and online banking expert with California Bank & Trust. “Fortunately, cash flow management doesn’t have to be a burden or an afterthought thanks to the availability of online and mobile banking.”

Smart Business spoke with Glass about the ease and advantages of managing cash flow through mobile and online banking.

What types of transactions are available through mobile and online banking, and what are the benefits?

Almost any banking transaction can be initiated over the Web or from a smartphone using a mobile application, giving business owners the opportunity to seize control and hang onto their cash longer. For example, instead of waiting to go to the bank, owners can make deposits any time and control the timing of invoice payments from anywhere in the world using their mobile device.

They can transfer money from a general account into a payroll account right before payday, schedule vendor payments, or pay sales and payroll taxes on the due date by initiating ACH transactions. Essentially, they have the ability to view and manage their company’s cash position at their fingertips 24/7.

How does online banking improve the accuracy and convenience of cash flow forecasting?

Business owners don’t have to wait for their monthly statements to arrive to close the books or reconcile accounts. Now, they can forecast cash flow, analyze trends and make advantageous moves by downloading transactions and e-statements over the Web. They can then import the information into accounting programs such as QuickBooksTM or Quicken®.

Having instant access to credit card transactions, loan balances, deposits and invoice payments helps business owners estimate cash conversion cycles, identify cyclical revenue trends and spot opportunities to put excess cash to work. Some owners have used the information to improve cash flow by offering clients discounts or other incentives for quick payments, while others have offset seasonal downturns by offering customers complementary services. Still others have launched month-end sales to reduce inventory and raise cash before large invoices come due. Online banking evens the playing field between small and large businesses by giving owners access to the same data and sophisticated analytical tools enjoyed by Fortune 500 CEOs without the hefty price tag.

How can owners use online bill pay to improve cash flow?

Online bill pay gives owners the tools and the confidence to negotiate discounts by making bulk purchases or paying bills on time. Because they always know their company’s cash position, owners can schedule payments in advance, wire funds or tap a line of credit to pay invoices. In addition, they can cancel or delay a payment if there’s an issue with a vendor’s product or service, and they can control cash outflow by giving employees specific authority levels and approving transactions online. Online bill pay reduces fraud, the number of errors and late payment penalties by making it easy for multiple people to review and approve every transaction.

How can business owners control cash by monitoring transactions online?

Owners can improve cash flow by tracking incoming wire transactions and initiating collections calls to tardy customers, or they can discuss a client’s payment history and terms during a visit by accessing data from their smartphone. Essentially, there is no reason to wait for payment when clients can pay invoices electronically or via credit card, and owners have the ability to monitor transactions online. But if a client wants to pay by check instead, owners have the ability to deposit the funds into their bank account on the spot from their smartphone.

From a business owner’s perspective,time is money, so one could say that online banking is a windfall. Employees can initiate transactions, balance accounts and make deposits right from the office, and owners can pay down loan balances, check credit lines or approve transactions from cabs, airports or coffee shops. Visits with a banker can center on strategy, revenue-generating opportunities and relationship building instead of on routine banking transactions.

Is online banking more expensive than traditional banking services?

Online banking costs no more than traditional services. In fact, it is more cost effective when you consider the cost of checks, postage, gasoline, employee time and travel. How much will you save by reducing days sales outstanding by a few days, paying down debt or avoiding fees and penalties by paying your bills or taxes on time?

Do business owners need a connection to process mobile or online transactions?

Online banking is accessible over the Internet or mobile Web. Mobile banking is available through providers such as AT&T, Verizon, T-Mobile and Sprint on a variety of devices, including BlackBerry, iPod Touch, iPhone and Android*. Given the convenience and ease of online and mobile banking, there is no reason why cash flow management can’t be a simple, daily activity.

Pamela Glass is a project manager and mobile and online banking expert with California Bank & Trust. Reach her at pamela.glass@calbt.com.

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Published in Los Angeles

After toiling for years to build a successful enterprise, business owners have earned the right to leave on their terms and retire. However, nearly half of owners fail to achieve their timing or financial goals because they focus on day-to-day operating challenges instead of creating viable exit strategies.

“Procrastinators usually end up dying with their boots on, when they could be enjoying the fruits of their labor by planning ahead and orchestrating a seamless transition,” says Greg Chiampou, director of Business Advisory Services for Contango Capital Advisors, which operates as CB&T Wealth Management in California.

Smart Business spoke with Chiampou about the process of creating a proactive exit strategy.

When should owners initiate the planning process and who should be involved?

Ideally, owners should begin to plan five to seven years before they want to leave because it takes that long to stage for an ownership change. It also may take up to three to five years to establish a complementary estate plan. Planning ahead gives owners time to groom successors or implement structural changes that enhance a company’s value and maximize sale or transfer proceeds by reducing tax liabilities. Assemble a transition planning team that includes a certified exit planner, CPA and attorney, who may get support from an insurance adviser, business appraiser and financial planner.

Why is goal setting paramount and what should the goals address?

The owner’s goals serve as the plan’s foundation so the owner must decide when he or she wants to leave, who will take over the business and how much money he or she needs to support his or her lifestyle. Then, the planning team can flesh out the details and assess the feasibility of the owner’s objectives by using models to test the plan’s elements. For example, testing may show an owner will have to sell to a third party instead of transitioning ownership to children or employees in order to derive enough proceeds to generate an annual income of $500,000.

Who should perform the valuation and cash flow projections?

Since the business is usually the owner’s largest asset and its value is a critical element of the strategy, owners need an accurate, objective appraisal. Engaging a certified appraiser or valuation specialist doesn’t have to be expensive, and the peace of mind generally is worth the investment. Verify business and personal cash flow estimates by asking a CFP to review the accuracy of the financial assumptions.

How can business owners enhance their company’s value before a sale or transfer?

Tactics that can boost a company’s value include:

  • Mitigating concentrated risk: Expose concentration risks such as a limited customer base, suppliers or products by giving owners the opportunity to secure long-term sales or supplier contracts, or increase vendors and product offerings before a sale.

  • Separating assets: Strategically transfer ownership of major assets like a warehouse, office complex or franchise agreement to a separate LLC, which can boost overall value.

  • Conducting audits: Identify and rectify financial discrepancies, environmental hazards or legal vulnerabilities by auditing your finances, property and legal profile.

  • Documenting operating procedures and retaining critical talent: Confirm continuity with organizational charts, documented procedures and secure key players. Buyers won’t pay full price if critical operating procedures, employees and institutional know-how could depart with the owner.

  • Staging: Prepare to tell prospective buyers how sales growth and earnings can be maintained and possibly expanded. Ensure your office or production facilities look like they deserve the asking price. While purchasing new equipment or furniture can boost a company’s image and value, don’t take on significant new debt ahead of a sale.

How can owners minimize the tax liabilities resulting from a sale or transfer?

Aside from the actual purchase price, taxes have the biggest impact on the proceeds from a business sale or transfer. Ask an exit adviser and CPA to review your strategy and suggest ways to reduce or eliminate capital gains and estate taxes. For instance, converting a C-corp to a S-corp can eliminate double taxation on the sale of business assets, and estate taxes can possibly be eliminated by gradually gifting shares to your children or transferring ownership to a family limited partnership or limited liability company. In fact, highly appreciated assets can be converted into a lifetime income without paying capital gains tax when the asset is sold by setting up a charitable remainder trust.

What should owners consider when developing a contingency plan?

Even the best succession plans can be thwarted by the defection of key employees or customers, the sudden death of a partner, an unanticipated cash shortage or a scion’s desire for a different career. That’s why every organization needs a contingency plan that provides solutions to game-changing problems and events. Examples include buy-sell agreements that govern should an owner die or decide to leave, employee-retention bonuses backed by insurance and a mentoring program for successors. Given these tools and a little time, a team of skilled advisers can ensure that business owners exit smoothly.

Wealth management services are offered through Contango Capital Advisors, Inc. (Contango), which operates as CB&T Wealth Management in California. Contango is a registered investment adviser, a nonbank affiliate of California Bank & Trust and a nonbank subsidiary of Zions Bancorporation. Some representatives of CB&T Wealth Management are also registered representatives of Zions Direct, which is a member of FINRA/SIPC and a nonbank subsidiary of Zions Bank. Employees of Contango are shared employees of Western National Trust Company (WNTC), a subsidiary of Zions Bank and an affiliate of Contango.

Investment products and services are not insured by the FDIC or any federal or state governmental agency, are not deposits or other obligations of, or guaranteed by, California Bank & Trust, Zions Bancorporation or its affiliates, and may be subject to investment risks, including the possible loss of principal value or amount invested.

Greg Chiampou is director of Business Advisory Services for Contango Capital Advisors. Reach him at greg.chiampou@contangoadvisors.com. Reach California Bank & Trust at www.calbanktrust.com.

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Online banking is convenient, but it’s easy for cybercriminals to gain access to your accounts when you process transactions over the Internet. Organized criminal gangs are using malware and phishing schemes to steal approximately $1 billion from small and mid-sized companies across the United States and Europe each year, and the problem has become so pervasive that a recent theft of $100 million from a business account barely registered on the FBI’s radar.

The good news is that it’s possible to enjoy the convenience of online banking without exposing your company to unnecessary risk by taking advantage of a bank’s products and services and exercising some basic precautions.

“Cybercriminals pose a real and serious threat,” says Barry Langer, first vice president and customer relations manager for Corporate Services at California Bank & Trust. “Executives need to educate themselves and understand the risks, then take some basic steps to safeguard banking transactions.”

Smart Business spoke with Langer about balancing risk and convenience by protecting your bank accounts from the most common forms of fraud.

How are cybercriminals attacking business accounts?

Companies incur risk whether they’re writing checks or processing online payments, but the greatest threat occurs in cyberspace. When an unsuspecting employee opens an authentic-looking email or document from an imposter, wily cybercriminals can steal user names and passwords by downloading malware such as the Zeus virus onto computers. Cybercriminals can also embed viruses in Web sites, innocuous Word documents such as resumes or simulated email alerts from social networking sites such as Facebook. Unfortunately, employees often fail to recognize an attack because the virus is programmed to evade network security, giving fraudsters access to your accounts. Worse yet, anyone can purchase the Zeus Trojan for about $700.

How can companies minimize risk and the possibility of fraud when processing online banking transactions?

Your employees need to serve as the first line of defense, but they need training to recognize cybercriminals’ tricks and tactics and thwart potential attacks. In addition, companies need to notify their bank immediately if they suspect a breech.

Businesses should also:

  • Eliminate outside risk. Don’t rely solely on security software, antivirus programs and firewalls. Protect your system from viruses and malware by stopping employees from downloading documents stored on external flash drives or CDs, or accessing outside email accounts. Better still, keep viruses from invading your network by using a dedicated computer strictly for banking transactions because most viruses are transmitted via email or while surfing the Internet.

  • Reconcile accounts. Nip fraudulent activity in the bud by reconciling your business accounts daily.

  • Take advantage of bank products and services. Your bank can help you prevent fraud by providing education, best practices and tools such as antifraud software.

  • Implement a dual authentication security process. This is another way to prevent online payment fraud, as different people create and approve each transaction. While the duplicate process requires additional time and staff, it reduces the opportunity for someone to initiate or approve fraudulent payments.

How can companies minimize the risk of paper or check fraud?

Unless companies use a fraud prevention service such as Positive Pay, forgers can wash payees’ names from stolen checks and substitute their own, alter the amount or use software to duplicate checks. With the Positive Pay service, companies send a check issue file to their bank and it is matched against checks presented to identify discrepancies or suspect checks.  Checks that do not match the check issue file are presented to the company for examination. While it’s not free, Positive Pay has the ability to lower costs by reducing unauthorized transactions, potential losses and legal fees.

Positive Payee Match provides another layer of security, as your bank also matches the name of the payee against the roster of issued checks. You can also review the front and back of exception items online and quickly make payment/return decisions from the convenience of your office.

If you don’t want to provide a check issue file, you can monitor presented checks online and return them immediately by utilizing an alternate service called Reverse Positive Pay.

How can companies prevent ACH fraud?

Savvy companies are reducing risk without sacrificing convenience through a service called ACH Positive Pay, which enables you to view and make decisions to accept or reject ACH items before they post to your account. If reviewing every transaction is too time consuming, simply create a filter and review and approve transactions above a specified dollar limit.

How can executives spearhead fraud prevention efforts?

Executives must set the tone by acknowledging the seriousness of the threat and prioritizing risk mitigation over convenience when processing banking transactions. Small to mid-sized businesses are particularly vulnerable to cyber attacks, so executives at those companies should utilize the risk assessment tools and best practices provided by your bank. Remember, an ounce of prevention is worth a pound of cure because a single attack can easily cost your business hundreds of thousands of dollars.

Barry Langer is first vice president and customer relations manager for Corporate Services at California Bank & Trust. Reach him at (213) 593-3838 or Barry.Langer@calbt.com.

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