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Three rules you must follow to prevent payroll fraud

by , 03 November 2014
Payroll fraud happens when someone gets into your payroll and manipulates it to benefit themselves and it could cost your company millions.

Don't let your company experience this fate! Simply implement some basic controls and you can stop employees from taking advantage of the system.

Here are three payroll control rules you must follow to prevent payroll fraud...

 

Prevent payroll fraud by following these three rules

 
Rule 1: Never share the login details for your payroll system with your staff
The only people in your staff who should be able to login to your payroll are you, your payroll manager and your finance officer. 
 
These are the people who need to use and work with the system to manage your company's finances. If anyone else has those logins, they could use them to get into your system and pocket extra cash from your company.
 
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Rule 2: Use formal company documents
Formal documents such as leave, take-on and reimbursement forms will stop employees from making fake claims or adjusting the system. For example, your employee can't say you still owe him paid leave when really you don't if you have formal leave forms to prove him wrong. 
 
Don't give employees the formal documents unless you know they have to complete it and ask them to fill it in immediately so they can't make photocopies.
 
Rule 3: Always cross reference
You must compare your payroll to your other systems, such as your bank account statements, to ensure everything matches up. This is how you spot warning signs so check and reference them carefully.
 
Follow these three rules to ensure your employees do take advantage of your company.
 
Check out the Practical Accountancy Loose Leaf Service for more on payroll controls to prevent fraud.
 


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