William Friel

Wednesday, 02 November 2005 05:48

Protecting your business against fraud

Warnings about identity theft and tips to protect your personal bank accounts are everywhere, but little fuss is made about business owners protecting their accounts against fraudulent activity.

Thanks to a variety of bank services and technology, you have some options today to protect your business.

Paper checks
Despite the increasing popularity of electronic payments, nearly 60 percent of all business-to-business payments today are made via a paper check. Here are some ways to ensure your checks are secure.

  • Use checks that are imbedded with watermarks and microprinting. These features deter fraud by making reproductions more difficult.

  • Use checks made of heat-sensitive ink and paper, which are more difficult to reproduce using basic photocopying equipment.

  • Use electronic bank account statements if available. Paper bank account statements put you at greater risk by making sensitive information accessible through the mail.

  • Keep track of your checks. It may seem obvious, but one of the best ways to protect your business from fraud is to keep track of where your physical checks are at all times. Don’t leave checks sitting out for others to steal.

  • Add a positive pay or payee positive pay service to your business accounts — two add-on services available through most banks. For a nominal charge, any checks processed through your corporate checking accounts will be carefully scrutinized.

A positive pay service starts with you sending a list to your bank of all checks issued. The bank matches the check number, dollar amount and account numbers of all inbound checks against your list.

Any checks that do not match your list are flagged for review. With most positive pay services, you can go online to review images of your checks that are flagged as exception items. You reduce disbursement risk by easily reviewing suspect items and alerting the bank whether to pay them or to return them.

With payee positive pay, when providing your bank the check number and dollar amount of checks issued, you also include the payee. Again, you may review exception items online and alert the bank to pay or to return the check.

Electronic payments
Technology is helping businesses secure their payables and receivables when electronic payment formats are being used.

  • Automated clearinghouse payments (ACH). It is cost-effective for suppliers and customers to pay via ACH. However, you must provide your bank account information before an electronic payment can be initiated. While necessary, it puts your accounts at risk. With a Universal Payment Identification Code (UPIC), you can receive electronic payments without disclosing confidential bank information.

Your UPIC number serves as a universal remittance number and masks your real account numbers. UPIC technology also limits account activity to credit payments and blocks all debits. If you should move your accounts, the UPIC number remains the same.

  • Credit card payments. To protect credit card payments, both VISA and MasterCard have implemented universal precautions for businesses that accept credit card payments.

The standards require companies to follow certain procedures when handling cardholder data and include a number of criteria, such as quarterly network scans and audits by qualified independent security assessor,s to ensure merchants and service providers protect cardholder data.

  • Purchasing cards. New technology is available to enhance controls on purchases made by employees with purchasing cards. This technology enables your organization to instantly manage the available credit on individual purchasing cards.

Technology advances also let you to limit purchasing activity through an array of card-spending controls, including monthly and per-transaction limits, as well as merchant spend categories that only permit use of the card with certain merchants. Some card programs provide online access to manage these parameters directly from your desktop computer.

This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.

William Friel is sales manager for corporate banking in Philadelphia at PNC Bank, National Association, member of The PNC Financial Services Group Inc. Reach him at (215) 585-5242.

Monday, 25 April 2005 09:59

Go global

Increased pressure on the dollar can bring with it substantial advantages to businesses. Many business leaders see opportunity in a weaker dollar value through the international marketplace. Of course, looking to a foreign market is nothing new; successful business leaders have always thought beyond our borders to open a world of new market opportunities.

Are you ready? To be successful, you need to make informed decisions and a commitment in terms of time, staff and funds. But it's within your reach.

The numbers add up

First, ask yourself, is your product something that foreign consumers or manufacturers might need or desire? If your answer is yes, you should consider the value of exporting.

Are you worried that your company isn't big enough to export? Think again. Size isn't an issue.

Companies looking to increase profits through exporting have at least two options - hold the price of your goods constant in foreign dollars and get more back in U.S. dollars than you would have previously, or keep your price consistent in U.S. dollars and make more in volume. That means that if your product costs $1 in euros, it now takes more dollars to equal a euro. If you hold your price the same in dollars, the lower cost in euros might convince foreign customers to buy more.

Are you ready?

When evaluating the export potential of your business, start with these basic questions.

* Has your product been successfully marketed in the United States? If so, there's a good chance that it will be successful in similar markets abroad.

* Have sales declined locally due to increased competition or the introduction of a more technologically advanced model? Other countries may not need state-of-the-art technology and may welcome another supplier.

* Is your product unique? Does it have important features that are difficult to duplicate abroad?

If your product successfully measures up to these general standards, the next step is to assess your company's commitment to developing a proactive, long-term export business. According to the Pennsylvania Economic Planning and Development Council, additional self-assessment questions include:

* Does exporting fit into your overall marketing and sales objectives?

* Can you give foreign customers the same attention and service you give to U.S. customers?

* Are you willing to modify product packaging and ingredients to meet foreign regulations and cultural preferences?

* Are you aware of the constant change in foreign exchange rates that can impact sales and profits?

Formulating an export strategy based on solid information and proper assessment will help bring success.

Local resources and expert advice

Perceived barriers to exporting, such as foreign languages, foreign currencies and other issues, can be better navigated with input from resources in your own business community, including small business development centers and regional planning and development commissions.

Select financial organizations also can help. From setting up letters of credit and hedging foreign exchange risk to securing financing for your buyer and establishing local banking services, banks work with companies and sponsor trade workshops to spur growth beyond the U.S. borders.

Don't let the "E" word dissuade you. Exporting can be quite profitable, especially in this time of a weaker dollar. With improvements in communications and technology, exporting is a real option for many companies. How about yours?

William Friel is executive vice president and region sales manager for corporate banking in Philadelphia at PNC Bank, National Association, member of The PNC Financial Services Group Inc. PNC Bank is a 2004 Presidential "E" Award winner, honored by the U.S. Department of Commerce for export services. Reach Friel at (215) 585-5242.

This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.