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HRM and Payroll Software
Payroll fraud is the theft of money from an organization via the payroll processing system.
Payroll fraud is the theft of money from an organization via the payroll processing system. Without the correct procedures in place, payroll fraud goes unnoticed for a considerable amount of time causing an organization to fall into losses. There are several ways of committing payroll fraud. For example, ghost employees, timesheet fraud, and false expense reimbursement. A Ghost employee is a person who is on the payroll but does not work for the company. The employee is entitled to all the bonuses and benefits just like other employees, however, the money is going straight to the fraudster’s account. Timesheet fraud involves paying employees incorrectly for the hours they work. In most cases, organizations overpay employees based on manipulated timesheet submissions. False expense reimbursement is the most common form of payroll fraud. The claims often include false expenses for items or events that never took place. For example, claiming travel costs, and manipulation of receipts before being submitted. In addition, some employees claim to have lost their receipts to avoid presenting them and make false claims.
Conduct a background check on everyone who is responsible for preparing and submitting the payroll and have access to the organization’s accounts. This helps ensure the person hired is trustworthy and of high integrity.
It’s always good to review payroll reports after payroll processing to ensure that employees are receiving their correct pay. It is also important to cross-check employees' addresses and bank account numbers to see if multiple payments have been made to the same bank account which is a way of committing payroll fraud.
It is one of the best practices in an organization for those who absolutely need to access payroll data. Each employee should be provided with login information to access the payroll data and establish a policy against password sharing.
Organizations should outline expense policies clearly by making it mandatory for employees to produce receipts whenever they are making an expense claim. Payroll software allows employees to upload their receipts as evidence of any claim.
In conclusion, outsourcing your payroll is an efficient and cost-effective way of paying your employees. In addition, it ensures safe and accurate payroll processing. Interested in preventing payroll fraud in your organization? Learn more about Loopholes in Payroll or perhaps Payroll Processing Using Your Trusted Software and An Invasion Destined To Disrupt!
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