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Positive Pay = Smart Move
Positive Pay, a cash management service offered by many banks, is designed to detect and minimize check fraud. The process is relatively simple: a company sends its bank a list of checks issued each day, typically through a file upload process. As checks are presented to the bank for payment, they are matched electronically against the previously submitted lists of transmitted checks. The check number, account number and dollar amount of each check must match exactly. If a check is presented that does not match, it becomes an exception item. The bank then typically sends a fax or an image of the exception item to the company. The company reviews the image and instructs the bank to pay or return the check. Banks may or may not charge a fee to the company for the Positive Pay service. C&G Consulting helps companies generate the Positive Pay files to meet their bank requirements.
Many companies do not consider the need for Positive Pay until they are victims of check fraud, a major financial crime resulting in billions of losses annually. When used together with a highly secure check form, Positive Pay can dramatically cut fraud losses, assuming there is proper segregation of duties and no collusion. Positive Pay is a particularly strong antidote against stolen or forged check stock.
We recommend that all our customers strongly consider the costs and benefits of Positive Pay. For more details, contact Rick Sovitzky (rsovitzky@c-gconsulting.com).
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