Mainebiz

W W W. M A I N E B I Z . B I Z 33 N OV E M B E R 2 7 , 2 0 2 3 H OW TO F O C U S B A N K I N G / F I N A N C E / I N S U R A N C E B Y L U C I E H A N N I G A N , B Y L U C I E H A N N I G A N , M A C H I A S S A V I N G S B A N K M A C H I A S S A V I N G S B A N K W hen the pandemic struck, formerly mundane tasks such as picking up the mail and signing documents became difficult. Businesses scrambled to implement paper-free and virtual processes, adapting to the new reality. While both nonprofits and for-profits grappled with implement- ing these changes, nonprofits often have small in-house teams, requiring everyone to work and handle finances as efficiently as possible. Now, three years later, many orga- nizations are evaluating how many of those changes should be retained, reversed, adapted, or expanded. Executive directors of nonprofits are concerned with the security of the orga- nization's funds, as well as managing cash flow for the highest possible return and meeting board requirements. Reducing paper financial transac- tions and evolving to a cashless envi- ronment should be a priority. Cashless payments provide a range of benefits to nonprofits, their boards, and their customers — if organizations are careful about what processes they implement and how systems are managed. For years, Americans had been slowly moving away from cash and paper checks, but the pandemic super- charged the trend. By last year, 41% said they never use cash for purchases, up from 24% in 2015, according to the Pew Research Center. Only 14% still exclu- sively use cash and checks. Electronic fund transfer, touchless payment, digital wallets and mobile payment services are mainstream. e number of active Venmo users neared 80 million on 2022 and is projected to surpass 102 million by 2026, according to surveys conducted by research firm eMarketer. Consumers and businesses alike are comfortable conducting busi- ness electronically. As a result, compa- nies tied to paper are at risk of losing customers. e possibility that employees might take cash from a till or that custom- ers might write bad checks are long- standing business risks. However, the risk has been growing in recent years. e Financial Crimes Enforcement Network, an arm of the U.S. Treasury Department, issued a warning in February that there has been a sharp increase in the theft of business, per- sonal, and government mail to commit fraud and obtain personal information for identity theft. Separate research by Association for Financial Professionals found that 63% of business respondents said they experienced check fraud — more than double the rate for ACH fraud (30%) and wire fraud (31%). Digital transactions also allow for far greater oversight and control of pay- ments. Fund transfers are electronically tracked at every step. Do it the right way e move to digital transactions can occur smoothly and safely if you fol- low the right practices and procedures. Details are important because gaps in procedure are an invitation to fraud. Here are some best practices. Take a step back: Understand who has authority to move funds and rec- oncile accounts. Ask yourself whether those people should still have those roles and responsibilities. Review roles, especially for individuals responsible for accounting, the controller and the book- keeper. Segregate duties and implement dual control where appropriate. Understand and implement solu- tions: Consider what digital transaction methods make sense for your business, including credit cards, wire transfers, and Automated Clearing House (ACH) transactions. Educate employees: Train all mem- bers of your team — not just those in finance — about the appropriate way to handle business information. Make electronic payments stan- dard: Regularly ask clients to use elec- tronic payment and set up processes that make it easy for both sides of the trans- action to make digital transfers. Require the use of electronic transactions as part of your contract with vendors. Use fraud prevention services: Work with your bank to ensure they know the checks you do continue to use, so they can be matched to the check register when presented. Also inform your bank about who is allowed to access funds. Lucie Hannigan is senior vice president of cash management a t M a c h i a s S a v i n g s B a n k . d i s c o v e r t h e j o y of a brand new 22 LOCATIONS ACROSS MAINE & NEW HAMPSHIRE HAMMONDLUMBER.COM 1 COLLEGE CIRCLE | BANGOR, MAINE | 207.941.7641 | husson.edu 125 Y E A R S 1898 – 2023 HOW CAN WE CULTIVATE LEADERS AT EVERY LEVEL? Our Institute for Strategic Leadership and Workforce Development is designed to assist with: HUSSON IS HOW. ■ Providing valuable upskilling for employees ■ Leadership training for high potential and current leaders ■ Access to quality interns ■ Strategic and workforce development goals Make cashless payments work for your nonprofit H OW TO

• Cover