Ensuring the security of your business funds: Six tips for SME owners
Keeping your business funds secure goes beyond simply owning a safe or locking down your cash register after hours.
Modern SMEs now count on a variety of channels – such as bank transfers, digital wallets, and credit cards – to conduct transactions and store funds. As such, these channels need to be secured at all times against cyber threats, fraudulent activities, and financial mismanagement. You need to be vigilant about security not only to avoid these issues but also to maintain cash flow, prevent losses, and build financial stability.
So, to that end, here are some practical tips to help you safeguard your SME’s finances.
Choose reputable financial service providers
Your chosen small business banking services provider is your partner in keeping your money secure. It’s thus important to work with established banks, payment processors, and financial institutions you can trust to ensure that your money is handled securely. To find the best possible options, research financial service providers before opening accounts.
For instance, if you’re looking for a digital business bank, Maya has a digital bank license from the Bangko Sentral ng Pilipinas (BSP). Aside from working with the BSP, trusted financial services providers like Maya adhere to strict regulatory compliance, implement world-class security protocols, and offer top-notch customer support. Additionally, ensure that the provider you choose offers fraud protection features, such as transaction monitoring and dispute resolution services.
Prioritize digital and data security
Cybersecurity threats can put your business funds at risk, especially if you rely on online transactions. To protect your SME from bad actors, implement strong passwords for your accounts, enable multi-factor authentication (MFA), and regularly update your software and systems. Make it a point to use encrypted connections and trusted payment gateways for every transaction to minimize risks. It’s also smart to invest in cybersecurity training for employees to help them recognize phishing scams, malware, and other online threats.
SMEs, unfortunately, are a common target for cybercriminals who assume that these businesses have weaker security protocols than large corporations. Knowing this, take proactive measures to keep sensitive financial data secure, such as by regularly backing up data and using firewalls to block unauthorized access. Also, consider hiring cybersecurity professionals to assess vulnerabilities in your digital infrastructure so that you can then implement necessary safety measures.
Monitor bank and transaction statements regularly
Keeping a close eye on your business’s bank statements and transaction history allows you to quickly spot unauthorized or suspicious activities. Many fraudulent transactions can go unnoticed if you do not review your records frequently, so set up account alerts for unusual transactions.
Also, establish a routine of checking bank statements weekly and matching transactions with invoices and receipts. Using accounting software can streamline the process and flag irregularities in real time.
Diversify your income streams
Relying on a single revenue source can put your business at financial risk, especially during economic downturns. This makes diversifying your income a critical task, so that you can create financial buffers that can help your business adjust to sudden changes and stay afloat even if one revenue source faces challenges.
To this end, consider expanding to e-commerce, offering subscription-based services, or partnering with other businesses to explore new market opportunities. A diverse income stream helps cushion financial setbacks and provides greater stability in case of unexpected events.
Set clear financial controls and policies
Establishing internal financial controls helps prevent fraud and mismanagement. For instance, you can assign different financial responsibilities to trusted team members to avoid unauthorized fund access. Also, implement approval processes for transactions, such as requiring dual authorization for large payments, so that you can stay on top of significant money movement. With clear policies in place, you can ensure accountability and minimize financial risks.
At the same time, conduct regular financial audits to assess compliance with company policies and identify areas for improvement. Implementing strong financial controls like this not only protects funds but also creates a transparent and accountable financial environment within your organization.
Insure your business against financial risks
Insurance acts as a safety net in case of unforeseen financial threats. Business insurance, including cyber liability insurance and fraud protection coverage, can help you recover from financial losses caused by theft, fraud, or cyberattacks.
To choose the best policy for your business, evaluate the risks that you are typically exposed to. You may also want to consider key person insurance for business owners and critical employees. Understanding policy terms and coverage limitations ensures that you receive adequate protection when needed.
Ensuring the security of your business funds requires a proactive approach and combining financial awareness with the right tools and strategies. By implementing these measures, you can protect your business from financial threats, maintain stability, and focus on growth with confidence. The financial well-being of your business is crucial to its long-term success, and by staying vigilant, you can safeguard your hard-earned resources and create a secure financial future.
