Many businesses hire payroll services to manage their payments and ensure that their employees get their paycheques on time and avoid any complications. There are many benefits to having a payroll service as it avoids mistakes, programs payments to make it on time which reduces the need to follow up on missed cheques and delayed payments. However, just like in anything else, there is always room for error and for things to fall off the plan. Frauds, mistakes, and technical problems are not impossible and hence one should always be careful. Watch for these 4 kinds of payroll fraud that could destroy your business. Read on to find out more.
This refers to the possibility of paying more money for employees than they should be earning because of an error in the timesheets recordings. This is not necessarily a very common issue but it does happen whenever the switch to reconcile timesheets and payrolls does not take place at the time of the initial install of a payroll system. Regular follow up is also important especially when the company is too big and releasing large six digits figures in salaries it becomes very difficult to notice smaller discrepancies even when they are of a few thousand dollars.
Whenever a company decides to use payroll services, the issue of stealing is not usually their main concern as companies are usually respectable and hire reliable and trustworthy accountants. However, one never knows what to expect from individual accountants and the chance is always there. An easy trick in which an accountant can funnel money outside the company and into their own pockets is by writing out cheques to themselves and logging under another name they just wrote a cheque for making much more difficult to track the errors.
Another way a payroll fraud can occur is when an employee usually the accountant, starts writing out cheques for a “ghost employee” someone who does not exist in order to get the money themselves. This is a common type of fraud and occurs whenever the company is not monitoring seriously its money going in and out.
Worker misclassification fraud
As you may learn from reading, payrollserviceaustralia.com.au, this type of fraud is more or less the responsibility of the workplace administration. It occurs when they misclassify some of their employees as contractors for example to avoid paying them additional benefits and save on taxes and get some financial breaks. This leaves employees with less paid hours and far less benefits which bothers them and makes them think that they are being treated unfairly. This is why some start stealing money to compensate.
It is very important to be aware of all types of payroll frauds and how they occur in order to keep attention and be able to see if they are actually happening. To learn more and make sure that you are protecting yourself and your company it is important to remain informed. Check payrollserviceaustralia.com.au for more information about how to identify fraud and make sure you address it.
For more details you can read our article https://www.flashlightconnection.com/payroll-fraud-a-big-threat-and-how-to-avoid-it/