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Three easy steps you can use to eradicate the 'ghosts' in your company's payroll

by , 31 October 2014
You need a payroll system to control and monitor all the payments you make to and for your employees.

Unfortunately, these systems are vulnerable to fraud.

One of the most common and problematic forms of payroll fraud are ghost employees. This is when someone in your company creates a fake employee in your payroll system and links the ghost to their bank account.

When this happens you pay the ghost and one of your employees pockets the extra money each month.

You don't need to call the Ghostbusters though. Just follow these three easy steps to deals with it...


Here's how to get rid of ghosts in your payroll

Step 1: Compare all the employees you have on record (use contracts or take-on forms for this) with the employees in your payroll system.
This will help you spot any ghost in your system. 
Step 2: Check for records of the ghost just to ensure that it's really a fake employee and not just someone who's documents are missing.
If you're sure it's a ghost, remove them from your payroll.
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Step 3: Take a look at the bank details attached to the ghost. See if they're the same as any of your other employees or call the bank and ask who owns that bank account. 
Once you find out who's pocketing the ghost's salary, confront and discipline them immediately. 
Check and compare your payroll system at the end of every month to find and remove any ghosts that might have slipped in.
Put control measures in place to prevent further ghost problems. You can find three controls to hep you do this here
If you want more advice on how to prevent payroll fraud in your company, check out the Practical Accountancy Loose Leaf Service.

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