Small Business Security Tips (Pt. 3 Always Verify Vendor and Payroll Payment Changes)

When it comes to protecting your business from fraud, two of the most vulnerable areas are your vendor payments and payroll. Taking a few simple but powerful steps in these areas can help prevent serious financial losses and give you peace of mind.

View the short video below for more information.

Verify Vendor Information Before Making Payments

One common type of fraud happens when someone impersonates a vendor and requests that payment information be changed. This can result in large payments being sent to fraudulent accounts.

To protect your business:

• Never update vendor payment details based on an email alone.

• Call the vendor using a phone number you already have on file (not one included in the email) to confirm any changes.

• Have a standard verification process in place before any bank account or contact info is updated.

Even if a request seems legitimate, always take the time to verify it. Fraudsters often mimic familiar communication styles to gain your trust.

Be Alert to Payroll Red Flags

Payroll is another area where fraud can slip through unnoticed if you’re not regularly reviewing it.

Watch out for:

• Ghost employees – Fake workers on the payroll who are collecting paychecks.

• Unauthorized raises or bonuses – Payments made without proper approval.

• Unusual changes in hours or pay rates – Especially if they happen suddenly or inconsistently.

Always Confirm Direct Deposit Changes

Scammers may also attempt to reroute employee paychecks by posing as employees and requesting direct deposit updates.

If you receive an email from an employee asking to change their bank account:

• Do not process the change based solely on the email.

• Call the employee directly or speak with them in person to confirm the request.

• Have a verification procedure in place to ensure the request is legitimate.

This extra step only takes a moment but can prevent significant payroll fraud.

Simple Steps, Serious Protection

Vendor and payroll fraud can be incredibly costly, but it’s also preventable. A few extra minutes verifying payment details or reviewing payroll reports can save you thousands in losses.

Want to make sure you’re covering all the key areas? Download our free Small Business Security Checklist to help safeguard your finances.