Payroll fraud is a source of loss for every business but with payroll service, fraud can be stopped in it’s tracks. Whether the business is small or large there has to be a very clear understanding to all employees that they are being monitored and that fraud is not tolerated in the place of business. Payroll is one area where employees try to commit fraud, but with some control tactics in place, payroll fraud can be kept to a minimum.
Three major successful business practices to cut down on payroll fraud
- separate duties of payroll department
- management and boss monitoring of payroll
- monthly auditing of payroll and have payroll reports run
Separation of payroll duties is one of the most important defenses against payroll fraud.
When payroll services are all done by the same person and no one is watching that one person, you might be opening your business up to some kind of payroll fraud. The best defense against payroll fraud is dividing and delegating payroll duties so no one person is in control of the whole payroll situation. When duties are mixed and given to people that have no connection to the other as in whoever writes checks, is different than the person who enters employees into the system, and whoever checks hours is another person. All the duties also need to be checked and monitored by supervisors so that no one person has total control except the boss.click here to read more information about best payroll services.
Management Monitoring of Payroll Duties is Important in Payroll Control
Employees generally don’t want to feel like they are being watched, but some sort of payroll service helps keep control of payroll. Very simply put in place a monitoring system so that everyone involved in payroll knows that someone in management and even the boss is involved in the payroll duties. The monitoring helps keep employees in line from feeling they have any chance to commit any type of fraud. The best defense against fraud is the idea that fraudulent activity will be caught and the person prosecuted.read more about payroll fraud and polices at https://www.michigan.gov/ag/0,4534,7-359-82917_92258—,00.html
Auditing Payroll on a Monthly Bases Helps maintain Payroll Control
Monitoring and auditing payroll among payroll service may seem like the same thing but it is not. When employees know that a monthly audit will be preformed it is another set of defenses against someone trying to commit payroll fraud. It may seem like extra work and extra time but it is so important to have a monthly audit and make sure that employees know that the boss is watching and cares where his money is going and coming. With no monitoring or auditing assumptions can be made and fraud can begin. Monthly auditing of payroll cuts down payroll fraud and helps maintain payroll control.
When a business owner takes a little extra time for payroll control it helps keep payroll fraud to a minimum. There are three major ways to help maintain a healthy payroll department separation of payroll duties and monitoring and auditing payroll practices. Payroll fraud makes up for quite a bit of loss in revenue so when a boss takes the time to keep payroll service in line with simple reports they are sure to keep their payroll fraud under control.