The most common form of financial deceit is check fraud. The Association for Financial Professionals found that 80% of organizations reported fraud attacks and/or attempts in 2023, with check fraud leading the way by comprising 65% of those attacks.
Check fraud wreaks havoc with a B2B company’s finances, with experts predicting $24 billion lost to check fraud in 2024, and erodes trust between buyers and sellers. However, with the right tools, check fraud is easy to reduce or even eliminate.
One of those tools is AR (accounts receivable) automation. Not only does using AR automation result in faster payments and reduce costs, but this blog explains how it helps you and your customers steer clear of check fraud.
Secure payment methods
Check fraud began to skyrocket in 2020 and ‘21, when the government distributed checks to support families and small businesses during the pandemic. Since then, check fraud has skyrocketed by 385%. Many of these checks were intercepted and stolen through transit, a big reason why mail theft complaints went from less than 60,000 in 2018 to more than 250,000 in 2023.
A surefire way to avoid check fraud is to stop mailing and accepting checks. However, 70% of companies told the Association of Finance Professionals they don’t plan to eliminate check writing even as fraud surges. One reason is some sellers give them any other choice.
AR automation enables customers to pay balances through ACH (Automated Clearing House) and credit cards.
These options are speedier than checks, getting you paid faster, and safer too. ACH payments are made electronically and can’t be stolen out of a mailbox. They’re also equipped with data encryption, providing you and your customers with a strong layer of fraud protection. ACH payments are also easier to track than checks.
Credit card payments are secure because their data is also encrypted and tokenized. Like ACH, card payments are also made digitally, and businesses can track and dispute any unauthorized payments.
AR automation reconciles these paid invoices in a secure, digital platform, so you don’t have to worry about checks getting stolen or misplaced even if they do arrive on time. Aside from automation and reconciliation, the best AR platforms also process payments and save you money on card processing fees, enabling you to reduce costs while also securing your and your customers’ finances.
Not every case of check fraud is tied to theft. Paperhanging occurs when businesses or people bounce checks on purpose. David J. Turner, CFO of Regions Financial Group, which reported $153 million in check fraud losses through the third quarter of 2023, said it takes his bank up to 60 days to learn it accepted a bad check.
Paperhanging is impossible, however, if you encourage customers to pay through ACH or with credit cards.
Simplified payment process
It’s difficult to reduce and/or eliminate check fraud if you’re not giving your customers multiple ways to send you payments.
Through features like self-service portals and secure, buyer-managed digital wallets, AR automation allows customers to pay a bill by simply clicking a button. You can set up AutoPay, where you simply draft recurring fees from their digital wallet and ensure. And some AR platforms even give customers the opportunity to pay via the invoice email and bypass their portal.
These features simplify the payment process, safeguard financial data, and let customers know you’ve invested in their security and success.
AR automation from Bill360 is catered exclusively to help B2B companies and their customers. Through features like AutoPay, Pay Now, and secure, customer-managed digital wallets, Bill360 greatly reduces and often eliminates check fraud and helps cement trust between buyers and sellers. And our all-one-in embedded platform not only automates your AR process but also processes payments and reconciles invoices.
Technology moves fast, which is why we’re always updating our platform with the latest features and functionalities while still maintaining easy usage – Bill360 requires less than an hour of training and syncs seamlessly with QuickBooks and Xero.
Learn more about Bill360 by taking advantage of our no-risk, 30-day free trial.
