We have had many problems with fraudulent checks. A chain of custody of the checks does not seem practical. Any suggestions?


Do the checks go to the receptionist in sealed envelopes? For the checks that you have found altered, was the payee address checked for validity? This, of course, can be difficult if you are mailing to a P.O. Box. Do you have positive pay implemented with your bank? Here are a couple of suggestions: Use check stock that has a laser lock printing. This type of check stock locks the ink onto the paper so removal of the imprinted payee is not possible without obviously defacing the check and alerting the bank of an altered check. If the checks are not in sealed envelopes when handed to the receptionist, you may want to consider doing so. Implement positive pay with your bank if you don't have it already. This will ensure that the bank only clears checks that have the original payee issued from your system. We have a report on positive paylocated in the AP Research topic under Fraud.

Do a vendor database search to look for matches of employee names with vendor names; investigate any matches (e.g., Strickland Construction vs. John Strickland). You could also engage you bank to produced and mail the checks directly. Many large and regional banks offer a cost effective service that allows you to transmit a payment file to the bank and the bank takes care of the rest of the processing, from cutting the check to mailing it. A recent research article was done about electronic payments by banks in our AP Research topic under Fraud.

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