Business Asset

ABAGNALE'S ADVICE

Checks and Balances

By Frank W. Abagnale

Even in today’s digital world, there are occasionally times when a company check needs to be issued manually. Whenever those cases arise, there are a number of precautions that should be put into place to protect small-business owners from possible fraud:

	If manual checks are not the same as those used on a laser or dot matrix printer, be sure they contain their own security features. It is very important that these checks have chemical sensitivity for protection against chemical alteration or washing, especially if this check is written by hand.
	Manual checks should be locked and stored in a secure location. The check stock should be numbered.

	Consider using a check protector with a signature plate. This signature plate can be locked in the machine or removed and stored in a separate, locked location.
	If a check is manually signed, this same signature should not be readily available in company reports, mailings, brochures, etc. A rubber stamp signature should never be used.
	If an employee has to take checks out of the office and write them in a different location, keep close inventory of the checks removed from the office. If any checks get lost or misplaced, an immediate stop-payment order should be issued for that check number.
	Never pre-sign blank checks and leave them to be filled out as needed. This is a common practice for small businesses, but it’s a definite no-no.
	Finally, be sure there is segregation of duties—the person who writes the checks should not be the one who balances the checkbook. It is also a good idea for the person who manually signs the checks to review those canceled checks to verify their signature. Remember, these safeguards are essential for your business’s well-being and your personal protection.

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