Bank Signature Cards
A signature card is a document that a bank keeps on file with the signatures of all the authorized people on that account. The bank employees can use this card to verify signatures on checks to make sure the proper people sign them. In other words, a signature card is a fraud prevention tool that a bank uses to make sure unauthorized people aren’t forging checks in the company’s name.
Most businesses and law firms have multiple bank accounts, a signature card can also be used to identify the specific people who only have authorization to specific accounts. Law firms often set up separate bank accounts for payroll, operating, escrow a/k/a IOLTA trust accounts. This way the main operating account doesn’t have to write a payroll check to each employee.
Here are a few best practice tips of handling signature cards at your banks in order to keep the information on the cards accurate and to prevent fraud.
1. It is important that the person that is being trusted for handling signature of checks/wires has had a background check performed.
2. It’s always wise to have attorney, officers or principles if it isn’t a law firm and not employees.
3. Signature cards should be reviewed quarterly if not semi-annual if there is turnover with the firm/company.
4. Always keep a copy of all bank signature cards on file.