Dealers

10 Ways to Cope with Sneaks Who Play Fraud Games

Here are 10 ways to cope with ways a dealership can be defrauded, according to Plante and Moran certified public accounting firm

January 1, 2007

1 Min Read

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.

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