From One CFO to Another: Protecting your money and peace of mind
A few years ago, I was hiking with my family in the Great Smoky Mountains, when I started receiving text messages from Propel staff wondering why their paychecks weren’t in their bank accounts. My heart sank: Did staff not get paid because our account didn’t have the funds available? Were we the victim of fraud?
After some research in the parking lot of a trailhead, I confirmed that it hadn’t been an error or security breach in our systems, but rather the Silicon Valley Bank failure that ended up making headlines for weeks. Thankfully, our staff were able to get paid the following Monday. And, while we had a wild story to tell, our business carried on as usual serving and supporting the nonprofit sector.
Even though this was only a minor delay, I experienced how it felt to worry about lost resources and not being able to meet Propel’s financial obligations and continue with its mission. I also worried on behalf of my staff who depend on regular pay to support themselves and their families.
Sadly, many organizations don’t have the same outcome. Fraudulent transactions drain their bank accounts, and these worries persist, with a real impact on the organization and all its people.
It takes significant time and energy to get systems back online, gain back lost assets, and earn back the trust of staff, community, and funding partners. In the current political climate, we’re talking a lot about how to prepare for the potential of lost funding. But are you giving equal attention to protecting the assets you have now?
As a Chief Financial Officer, it is my job to ensure the safety and security of Propel’s financial assets, and I wanted to share some insights into the internal practices and external services I rely on to protect our financial assets.
Fraud Protection Services
What are they?
Fraud protection services are tools offered by banks to keep you informed of activity in your accounts and act as a shield against unwanted and fraudulent activity. Some services are available free of charge and others for a fee. They are designed to protect your assets and give you confidence that money moving in and out of your account is for transactions known to and authorized by you.
Why now?
Your cash in the bank is a valuable resource, and nonprofits are increasingly the target of fraud. There’s also evidence that the end of the year is “fraud season,” where there’s an uptick in fraudulent activity. Now is always the right time to consider ways to protect your financial resources.
How do they help?
These services can help you in a variety of ways regardless of how much money you have in the bank. Some options include:
- Positive Pay: You supply the bank with details of the checks you have printed to pay your staff and vendors (like name, amount, and date). Only checks that match those descriptions can be presented against your account. This service has caught several attempts by scammers presenting fake checks to draw funds from accounts I manage!
- ACH Preauthorization: You may have vendors who draw funds from your account automatically, like your payroll provider or landlord. With ACH preauthorization, vendors are only allowed to do this if they are on your approved list. I recommend reviewing this list on a quarterly basis.
- Transaction and Account Balance Alerts: You can enroll in this service to receive notifications of bank balances and transactions via text message or email and respond immediately if you see something suspicious. Often there’s a window of opportunity to report fraudulent transactions, and this can help you act as quickly as possible inside of that window.
What to ask your banker
Reach out to your bank and ask about fraud protection services. You can ask them:
- To review your account with you and offer recommendations based on their experience with other organizations your size or type.
- How to report suspected fraud. Knowing who to call will help you be prepared and not panic.
- What are they seeing as common or emerging types of fraud? Hearing these stories always helps me feel better prepared to recognize fraud attempts.
Many of these services won’t be free, but think of them as an insurance policy. You’re paying to protect your resources.
Regardless of what you decide is right for you, there are things you can do on a day-to-day basis to protect your organization’s assets.
3 Habits to Secure Your Assets
My colleague Paul May-Kramer describes fraud in a way that illustrates the true gravity of what it can mean for someone, or an organization.
“Consider the amount of scam calls you get in a day and remember every one of those represents an attempt to ruin your life,” he said.
“All the credit you rely on, all the money you have, everything: Someone is trying to take it and use it for what are often nefarious purposes,” he explains.
This makes protecting our assets even more important. Here are a few things we recommend you do to secure your assets:
- Check on your bank accounts every business day. Checking every day ensures you can flag any suspicious transactions. Maybe you don’t have time to record transactions every day, but making sure you know what’s happening in your account can mean all the difference for your assets. Banks can usually take swift action before a transaction is complete; but if it happened two weeks ago, there is less they can do.
- Review who has access to your accounts. Once a quarter, set aside time to review who has access to your checking and savings accounts. Note if there is something suspicious and investigate whether or not policy requires certain staff or board members to have access. Keep the circle small. When there’s a staffing change, make sure to remove access for departing staff immediately.
- Commit to a culture of security. Along with my colleagues in IT, we work to create a culture where our teams feel comfortable reporting suspicious behaviors and try to give them as many tools as possible to report something that seems off. It makes us a stronger team and helps us make sure our assets and time are going to where we intend them to go.
Securing your organization’s assets doesn’t have to be overwhelming; it’s about building good habits and staying vigilant. By checking accounts regularly, reviewing access, and fostering a culture of security, you’re taking important steps to protect what matters most.
You’ve Got This
As a CFO or financial leader, I already know that you are thinking about how to steward your organization’s assets responsibly. Remember: Every small action adds to stronger protection and greater peace of mind. Stay proactive, support your team, and keep safeguarding your assets for a safer future.
Thank you to Paul May-Kramer for his contributions to this post.