With this question, there are different factors at play. There’s what we recommend and there is also what happens in reality when founders are busy and end up resorting to the quickest method.
Ultimately, as a CPA, here at Kruze we would prefer not to receive bank statements via email. Here are the two main procedures that we recommend you follow when sharing statements.
Downloading Statements Directly Helps Prevent Fraud
First of all, your accountant or accounting firm should always pull your startup’s bank statements directly from the account themselves. This is to protect yourself from any kind of impropriety or fraud accusations.
One of the ways fraud can be executed is by a founder interfering with a PDF download of the statements. It’s relatively easy to download the statement, and use Adobe to change any numbers they may want, before sending it on to the accountant. There have been a lot of circ*mstances in which neither the accountant nor the board have any idea it’s happening because they are receiving the statements directly from the founder.
Here at Kruze, as a policy, we always try to download the statements directly. Sometimes there can still be something that’s slightly off, for example there could be a weird or rare credit card that causes something odd to happen. Either way, we recommend always downloading the statements directly as an accountant. And, of course, we want your accounting software to have API access to the statement directly, which is the best way to prevent any kind of possible fraud, and it reduces possible fat finger typo mistakes as well. If you’re looking for a banking relationship, please check out our Best Banks For Startups.
Use a Sharing Service
When it comes to sending statements over email, if you have to do so we really encourage you to use a sharing service such as:
- Google Drive
- Box
- Azure
- Dropbox
While email is quite secure, there is still a possibility that it can be hacked. By uploading your statements to a sharing service that your accountant can access, you add an extra security barrier against hacking.
Unfortunately, there can be a lot of stuff that goes wrong within people’s emails so we really discourage clients from sending bank statements via email even if it’s the quickest way to do so. We always prefer a file sharing service – this also helps with client confidentiality on our end.
Banks Take Security Measures with Statements
The good news is, almost every bank will block out the majority of the account numbers and other confidential information on the bank statement. Therefore, even if your email is hacked, you’re not going to be robbed in an instant. There are a lot of safety protocols, especially surrounding money transfers, for this exact reason. However, it is always better to be safe than sorry, so please use a sharing service, or, even better, let your accountant download the bank statements directly.
If you have any other questions on bank statements, valuations, startup investing, startup accounting, taxes, or venture capital, please contact us.
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