Here are 10 ways to cope with ways a dealership can be defrauded, according to Plante and Moran certified public accounting firm:
- Establish security agreements with the bank concerning electronic fund transfer transactions. A call-back procedure is effective.
- Establish an agreement with the bank whereby the dealership cannot sign up for automatic clearing house (ACH) disbursement capability
- Do daily bank reconciliations. (Some notification requirements are 24 hours only.)
- Sign up for bank-provided software that prevents an unauthorized outsider from tapping the cash account.
- Sign up for positive-pay capability. That's a process in which only those checks you electronically communicate on a batch basis to the bank are paid by the bank.
- Effectively use your available ACH password-level controls.
- Establish a separate floor-plan offset account which effectively is “locked by the financial institution.
- Reconsider if it is worth the fraud risk to leave large amounts of excess cash in the dealership.
- Limit the number of check signers.
- Seek out higher dishonesty-insurance coverage on check signers or any other cash handlers.