How to avoid payroll fraud?

Sources reveal about an average loss of $50,000 per year, when it comes to payroll fraud. How secured is a business’ payroll system? Apart from small scale business, it’s advised to go with outsourcing payroll for tax benefits and security reasons. Charting out security measures, it’s important to learn, how to avoid  fraud. An authentic payroll system brings down production costs and improves the functionality of balance sheets of an organization.

Who’s responsible for payroll fraud?

Ghost employees – If some employees are found fishy out of instincts, then it should be trusted. Some create fake employee accounts and they’re the only ones, who would be able to access them. It happens in all ways – credits, checks and cash deposit. Access to such classified data is restricted to avoid payroll fraud. One login credentials per employee and that’s the firewall.

Every data is disposed on time.

Background check on payroll – Security check is a standardized for the person, who takes charge of payroll. An entire organization’s turnover is right under his nose, so background check is needed, rather than walking towards disaster. Right from social security number, vehicle registration, license to criminal check, it’s an essential to run a credibility check on the source/person.

Sticking to Positive Pay Service – Availed from banks. Banks offer such a service that’s found to prevent payment fraud. It works this way – Payee, check number, presented by whom, account number, amount (in dollars), company.

It fits well with small scale business, but the same couldn’t be expected with developed and mass organization.

ACH filter – It’s found that ACH (Automated Clearing House) works well with preventing payment frauds. It keeps tabs with authorized debits and the list of vendors.

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