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Frequently Asked Questions
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What are the latest stats on B2B payments?
Business professionals sometimes find it difficult to stay on top of changing technology and best practices for the financial management of their company. One organization that is a valuable resource for financial professionals is AFP, the Association of Financial Professionals. AFP offers its members a number of products and services to help them perform their best, by conducting surveys, publishing white papers, workflow tools and information services. AFP recently released the 2013 AFP Electronic Payment Survey. This survey which is underwritten by JP Morgan Chase was last created in 2010. Much has changed in the business to business payment environment in the past three years. Industry experts have forecasted for some time a dramatic decline in check payments. The recent survey shows that businesses make B2B payments by check 50% of the time; this is a dramatic drop from the 2010 survey which reported 74% of B2B payments being made by check.
While check payments remain the dominant payment method; businesses are now sending more payments via ACH, wire, mobile payments and purchasing cards. The changes in payment methodology has produced cost savings, improved cash flow forecasting, provided better fraud control and more efficient account reconciliation.
Despite these benefits, there continues to be barriers to the adoption of electronic payments. Many businesses are reluctant to provide payment instructions for electronic payments. In some cases, electronic payments systems may require the help of IT staff to implement. IT staff may not be available to assist. Another barrier to electronic payments is the lack of a standard format for reporting remittance information. Some businesses will choose to send remittance information using EDI, Electronic Data Interchange/CTX addendum information. Email remains the most commonly used method for delivery of remittance information. Payment posting and account reconciliation continue to be challenging without a standard format for reporting.
There has been a surprising amount of growth coming from B2B Card Payments. 57% of companies now accept purchasing cards from customers. These payments can be accepted at the point of sale, by phone or the web. Many organizations have begun to use stored value cards for the disbursement of payroll, benefits such as health savings and flex spending accounts as well as employee expense reimbursements. Employers are turning accumulated rewards from their card programs into gifts and incentives for their staff.
It makes sense to periodically evaluate how you are performing payments. There may be new more efficient and secure methods for conducting B2B payments.
Is Cyber Liability Insurance necessary to protect my company?
Do you understand your company’s true risk and exposure if your network is hacked? What is the probability that your company will experience a cyber-security attack? In 2013, businesses have experienced a significant acceleration in the number of cyber-attacks. These crimes have ranged in size and scope from a huge cyber breach which resulted in the theft of $45 million from ATM machines across the US and Europe to smaller corporate account takeover attempts that occur daily and result in the unauthorized disbursement of funds through online banking wire transfer and ACH.
Most IT and Finance professionals design corporate networks to mitigate cyber risk through careful assessment of people, process and technology within their company. They develop IT policies and controls, systems for oversight and monitoring of staff, use internal audits, and develop disaster readiness plans. In addition to these steps, many companies have investigated additional protection through their business insurance coverage.
Traditional business insurance policies have limitations or exclusions for data breaches or third party liability. If you are in charge of risk management for your company, you should meet with your insurance agent to review coverage limits and examine whether or not a stand-alone cyber liability policy is needed to protect corporate assets.
Cyber liability insurance was once something only large companies carried; today the scope and affordability of this type of insurance has brought it in line for companies of all sizes. Today’s cyber liability policies cover the following risks: network security, privacy, electronic media, business interruption and cyber extortion.
In addition to the financial protection afforded by a cyber-liability policy, you are able to leverage the expertise of the insurance industries’ risk management system and legal resources to assist you in the initial assessment of risk within your business model and on-going oversight of risk in this ever changing environment.
What is a wholesale lockbox?
Lockbox can offer you increased cash and information flow, reduce your workload, help you streamline your receivable processing area, and increase security and reduce fraud risk.
We would like to emphasize that last benefit, increased security and reduction of fraud risk. Security concerns and the risk of fraud are concerns for everyone, both personally and for your business. Every day there is a news story about employees who have defrauded their employer or a company who has lost money because of the infiltration of their systems by outside hackers. So, you may ask, how can lockbox help?
First, by partnering with a trusted 3rd party resource such as First Business Bank to handle your receivables, you take the cash out of your office and get those funds deposited into your account immediately. Second, your receivable information is sent to you securely, in a format you can use, with a receivable receipt record on the bank side and on the company side. Third, separation of duties is something that every auditor looks for, and lockbox provides that dual control. Bank staff opens the incoming mail, deposits the checks, and sends you the information your staff people need to update your receivable records. The bank is also able to supply records for audit purposes, including copies of checks received.
First Business offers wholesale, retail and hybrid lockbox products. Call our Treasury Management professionals for a consultation, to see if lockbox may be the right treasury product for your business.
What does eco-friendly treasury management look like?
With today’s growing environmental awareness, businesses are looking for ways to reduce waste, save trees, and avoid the release of wastewater and the production of greenhouse gas emissions. Using “Green” technologies like online banking tools, electronic payments, billing and statements can help.
Businesses have used the Automated Clearing House (ACH) network for direct deposit of payroll for years. However, many don’t think to use it for other employee payments such as expense reimbursements and bonuses. And in the U.S. two-thirds of business-to-business payments are still made with checks. But that’s changing – the migration toward electronic payments is accelerating like never before. Not only are e-payments environmentally friendly, they are also more efficient, cost effective and secure than those made by check. Wire transfer, another form of electronic payment, is typically used for large dollar same-day transactions. And don’t forget credit card payments. Many businesses are earning cash back rewards by using card payments for travel, entertainment and other business expenses. So talk with your trading partners. Discuss how discounts and cost savings can be an incentive for agreeing to accept alternatives to check payments.
Electronic invoicing is another great way to reduce your paper footprint and it’s a logical paring with electronic payments. You’ll save money and your customers will appreciate this environmentally friendly option. PayItGreen, a coalition led by NACHA – The Electronic Payments Association, helps businesses understand how its use of paper affects the planet. Visit www.payitgreen.org
to learn more.
Still driving to the bank to make deposits? Replace this outdated, time consuming task with remote deposit and enjoy the convenience of electronically depositing checks right from the comfort of your office. Receive same day credit and confirm receipt of the deposit using online information reporting. Reduce your carbon footprint while your business saves money by eliminating paper deposit slips, loss of employee time spent going to the bank, and fuel costs.
Do you have to wait each month for your bank statement to arrive in the mail? Replace it with an eco-friendly e-statement. You will save precious resources, and benefit by receiving your statement faster and more securely.
We can’t change the world overnight, but we can make a difference by using technology that will reduce the environmental impact of our businesses. “Green” treasury practices will not only help save the earth’s valuable resources, but will have a significant impact to your bottom line by saving you money and improving relationships with your trading partners.
What are best practices for cash management?
Being proactive is the key to taking preventative action for many things in day to day life. We schedule annual check-ups with our doctors and have regular oil-changes and maintenance for our cars. Yet, often preventative action is not taken into consideration when protecting our cash and bank accounts. Most individuals and companies have the mindset, “It won’t happen to me”. This is not the case; fraud continues to increase every year.
Recent statistics according to the 2012 AFP Payments Fraud & Control Survey indicate:
- Two-thirds of organizations experienced attempted or actual payments fraud in 2011
- Twenty-eight percent of survey respondents report that incidents of fraud increased in 2011 compared to 2010
- Checks continue to be the dominant payment form targeted by fraudsters
- $19,200 was the average financial loss among organizations that did suffer a loss
Fraud is most of often detected through a complaint or tip from an employee, vendor or customer. The following is a list of best practices to assist in preventing fraud before it happens:
- Develop strong internal controls
- Segregate the duties of receiving funds, disbursing funds, writing checks, signing checks and reconciling the bank accounts.
- Timely reconciliation of bank accounts and utilize dual control have more than one individual review the bank statement for unusual transactions
- Set-up online alerts on bank accounts
- Consult with your banker about fraud protection tools available
- Consider a fraud check-up and have an independent review completed
First Business has an array of products and tools to protect you against fraud and has an experienced staff to assist you in taking the proactive approach against fraud. Contact us today to learn more.
- First Business Security Center www.firstbusiness.com
- The Internet Crime Complaint Center (IC3), a partnership between the FBI and the National White Collar Crime Center www.ic3.gov
What's First Business Bank's secure email system and how can I use it?
On February 4, 2013, we switched our secure email encryption service from Voltage to Cisco’s Registered Envelope Service. We use secure email to protect confidential financial information for clients. The switch required existing users to create a new user id and password. This change was made to automatically encrypt emails containing secure financial information.
As a client, if you'd like to send a secure email to us, step-by-step instructions can be found: http://www.firstbusiness.com/contact/email/
What hours is the Treasury Management Helpline open?
You can contact Treasury Management Helpline between the hours of 8:00 am to 5:00 pm, Monday through Friday. Call 608-232-5938.
When should ACH Positive Pay be used?
First Business Bank recommends ACH Positive Pay to manage the risk of electronic funds transfer fraud. ACH Positive Pay allows clients to review and manage approved ACH Debits within Online Business Banking. If an ACH Debit hits the filter, you'll receive an email and be prompted to review the ACH Debit item within Online Business Banking for approval.
What is Account Reconciliation?
Account Reconciliation is a new tool to help automate complicated, time consuming, and frustrating manual account reconciliation processes. This product is available via Online Banking and may be integrated with Positive Pay for increased fraud protection and ease of error resolution.
How Will U.S. Postal Service Changes Impact Your Collections Process?
The U.S. Postal Service financial issues have been widely publicized. Experiencing a significant reduction in the amount of single-piece First Class Mail, its most profitable service category, it ended the second quarter of its 2013 fiscal year (Jan 1 – Mar 31) with a net loss of $1.9 billion dollars. Faced with a massive nationwide infrastructure that is no longer financially sustainable, the U.S. Postal Service is making changes designed to save up to $3 billion a year by cutting its network of processing facilities by over half and adjusting service standards. Phase I began in July 2012 with consolidation of 140 facilities. Phase II will begin in 2014 completing the process with 89 additional consolidations. Two day service delivery has been reduced from a 500 mile radius to 250 miles moving more mail to three day delivery. In 2014 overnight delivery of First Class Mail will be eliminated.
How do these changes affect your company’s collection process? With 65% of business to business payments still dominated by check, the impact may be significant. The time it takes to mail a paper invoice and receive a check payment has increased. You may notice an increase in Days Sales Outstanding and credit holds. Your customers will continue to take deductions even though the payment wasn’t received on time. You are likely to spend more time researching payments, and communicating with trading partners and banks.
Fortunately, there are changes you can make to avoid these problems and save money in the process. Now is the perfect time to re-evaluate your collections process:
Consider electronic presentment of invoices – Save money on printing, envelopes, postage and employee time. Customers will receive invoices faster allowing for more time to process payments.
Evaluate grace periods and discounts – Most customers won’t change their payment process to account for the increased mail float.
Encourage electronic payments – Card and ACH payments are efficient alternatives that will ensure faster collections and reduce costs for both you and your customers. Wire transfers may be suitable for large dollar transactions. Work with your trading partners to determine the best method for delivery of remittance information.
Increase participation by offering favorable terms and discounts when paying electronically.
You may be surprised to learn that many of your customers are launching similar projects to move toward electronic payables. Card and ACH payments are less costly to process than checks. Electronic payments save reconciliation time, reduce the risk of fraud and completely control cash flow. Modifying your collections process in response to the recent U.S. Postal Service changes will reward you with increased efficiency, cost reductions and improved customer satisfaction.
What if I think I might be a victim of fraud?
• Immediately cease all activity from electronic devices that may be compromised. Disconnect your device to isolate the system.
• Immediately contact First Business Bank so that the following actions may be taken as a priority to contain the incident:
- Online access to the accounts must be disabled.
- Online account passwords changed.
- New account(s) must be opened.
• Review all recent transactions and electronic authorizations on the account.
• Ensure that no one has requested an address change, title change, PIN change or ordered new cards, checks or other account documents be sent to another address.
• File a police report with the local police department and provide the facts and circumstances surrounding the loss. Obtain a police report number with the date, time, department, location and officer’s name taking the report or involved in the subsequent investigation. Having a police report on file will often facilitate dealing with insurance companies, banks, and other establishments that may be the recipient of fraudulent activity. The police report may initiate a law enforcement investigation into the loss with the goal of identifying, arresting and prosecuting the offender and possibly recovering losses.
• Maintain a written chronology of what happened, what was lost and the steps that you took to report the incident to the various agencies, banks and firms impacted.
• Record the date, time, contact telephone number, person spoken to, and any relevant report or reference number and instructions.
• Review the recommendations at the Federal Trade Commission's Identity Theft website.
• Consider hiring a consultant to have your network and systems reviewed by a qualified computer forensic/information security professional.
How can I get a copy of my credit report?
We recommend reviewing your credit report at least once a year, looking for suspicious or unknown transactions. You can get a free credit report once a year from each of the three major credit bureaus at www.annualcreditreport.com
. For a small fee you can obtain a copy at any time directly from:
• Equifax: 1-800-685-1111 or www.equifax.com
• Experian: 1-888-397-3742 or www.experian.com
• TransUnion: 1-800-916-8800 or www.transunion.com
What are tokens?
Tokens are portable devices that increase login security. They use two-factor authentication to verify the identity of the user. Simply put, two-factor authentication is based on something you know (e.g., a PIN) and something you have (e.g., a token). By requiring two independent elements for user authentication, this approach significantly decreases the chances of unauthorized information access and fraud. Keep your token in a secure place.
What is phishing?
Phishing is an Internet fraud technique that is used by criminals to trick you into giving them personal information. Phishing occurs when a criminal sends you an e-mail message with a link to what may appear to be our website — but it is actually a fake. On this fake website, you will be asked to enter personal information, such as your social security number, account number or credit card number. Phishing is a fraudulent act aimed at stealing your identity and private account information. Phishers set up a phony website that looks like the site of a trusted company to trick you into disclosing your user ID and password.
What is Secure Sign On?
Secure Sign On is a service to help protect you from fraudulent online activity. It provides you with visual cues when you sign on so you know that you are on our website and it is safe to enter information. Secure Sign On also helps us ensure that only authorized individuals can access financial information online.
How can I get a PDF of one of my past First Business credit card statements?
It’s easy. Go to www.firstbusiness.com
. Under Access Your Accounts, choose either Business Account – Business Credit Cards or Private Wealth Management – Private Banking Credit Cards. Click on “Enroll” if you are not already enrolled. After enrolling, you will be able to view and print past statements.
What ATM options do I have with First Business?
You can use any ATM machine, but you may want to consider free or surcharge-free ATMs. a service like Allpoint
(which includes an iPhone App if you’re interested) can help you find surcharge-free ATMs in your area.
If I’m interested in ID theft insurance, who do I talk to?
ID theft insurance is a proactive way to guard against identity theft. Your credit bureau records will be monitored each business day, and alerts will be sent via e-mail or standard U.S. mail on changes to credit bureau information. Visit Deluxe Provent
for additional details and pricing.
How long should I keep a hard copy of the checks I submit through remote deposit?
We require that you keep a hard copy of submitted checks for 61 days.
What business internet banking options do you offer?
We offer a variety of internet banking options to meet our clients’ needs. Contact your First Business representative to get information on options that would be relevant to you and your business or nonprofit.