Benefits of Positive Pay in Banking

Check fraud can cost a business a significant amount of money. For businesses in the wine industry, losses caused by check fraud could affect the ability to grow grapes, maintain crops, and produce wine. It’s crucial that wineries do all they can to protect their investment.

Check fraud occurs when someone steals a check or steals information from a check to use for their own personal benefit. A form of identity theft, check fraud costs businesses in the U.S. millions of dollars each year.

Check fraud is more common than most people believe. In fact, around 1.2 million fraudulent checks enter the system every day. According to study conducted by the Association for Financial Professionals, 71% of all businesses surveyed experienced actual or attempted check fraud in 2015.

Even as other forms of payment become more popular, checks remain the leading payment method for fraud. This is due in part to the high availability of software, specialty paper, and high quality printers. These tools make it possible to create realistic checks. In fact, criminals often use the same tools businesses use to print their own company checks.

About Positive Pay

Positive Pay is a cash-management service offered by banks to help businesses detect and prevent potential check fraud. The service compares checks submitted for processing with records provided by the company. If the check number, amount, payee name, and account number do not match the list provided by the business, the bank will not process the check. This provides numerous benefits for businesses in the wine industry.

When provided through your bank, Positive Pay allows wineries to:

  • Secure their assets
  • Increase control
  • Streamline business operations

Positive Pay provides wineries with the information needed to detect suspicious check activity before it is able to affect the business. This safeguards the winery’s reputation and reduces the risk of financial loss.

Positive Pay enhances visibility of check activity, allowing for greater control over business finances. The system allows businesses to automate account payable workflows, minimize disruptions of operations, and simplify account reconciliation. Thanks to modern technology, business leaders can view exceptions and decide whether to pay or return them from any device that connects to the Internet.

Reverse Positive Pay System

In an effort to save money, some businesses elect for a Reverse Positive Pay system. This system requires the company to monitor checks for fraud. The bank sends the business information daily regarding issued checks. It is up to the business to determine whether checks should be paid or returned. Unfortunately, the bank will automatically pay checks if the company fails to approve or deny payment within a certain period of time. This makes the Reverse Positive Pay System an ineffective deterrent for check fraud.

Quality Financial Services for Businesses in the Wine Industry

Allen Wine Group LLP offers CFO, accounting, and bookkeeping services exclusively to businesses in the wine industry. Our team has years of experience providing quality financial services. Please contact us to learn how we can help your business.