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by Adam Bradfield

With the increase in Electronic Funds Transfer (EFT) payments how do businesses ensure they are not opening themselves up to potential mismanagement of funds?

If, as a business owner you have a multiple access company bank account and shared passwords within the organisation, who then tracks if there are incorrect payments transferred in or out of the account? Have you ever had a contractor or employee misappropriate money?

EFT is widely accepted as a method for businesses to transfer and receive funds however, the convenience of this facility does come with an element of risk:

  1. Payment errors including over or under payment.
  2. Theft from trusted employees, bookkeepers or family members.
  3. Duplicated transactions (paying an invoice twice)
  4. Deposits received directly into the bank account being diverted to another account or hidden in the general ledger.
    Being pro-active with implementing the following strategies will reduce your risk of theft or unintentional error.
  5. Review access to your account. Look out for:
    1. Ex-employees or bookkeepers still listed as bank account signatories.
    2. The number of people with access – are they all necessary?
  6. Information Technology. Have you:
    1. Changed your passwords lately?
    2. Shared your password? Shared passwords significantly increases the risk of theft or misappropriation.
    3. Got up-to-date anti-virus software to prevent viruses, malware and other hazards?
  7. Review and Authorisation of transactions. Do you:
    1. Have a dual-approval authorising physical EFT transfers?
    2. Adequately authorise each invoice prior to it being paid?
    3. Utilise your financial institutions Token Code or random password generator functionality?
  8. Pre & Post EFT transfer – Do you have procedures to ensure:
    1. Correct payee information is uploaded into EFT software?
    2. Correct invoice amount is entered into the EFT software?
    3. Amount physically transferred agrees to the general ledger?
    4. Accurately update payee or employee bank account details?
  9. Bank Reconciliations. Do you regularly:
    1. Reconcile receipts and payments for all bank accounts?
    2. Review ‘general’ journal entries?
    3. Review the bank reconciliation if it is prepared by an employee, bookkeeper or family member?

If you have any particular concern with regards to your existing EFT or bank account reconciliation and review processes, you should get a professional customised review of your business to mitigate identified risks. Call (02) 6626 3000 or 0407 219603 for more information.