Protect your Business from Payroll Fraud

Payroll can be tricky. As a small business owner, you likely already know this reality. Entering incorrect information can lead to big fines so it is wise to outsource your company’s payroll duties. But not all payroll companies are created equal these days and you can easily get your business wrapped up with a fraudulent payroll company. To help you along the path of choosing a payroll company, we will share below what you need to know about payroll fraud and how to protect your business from it.

About Payroll Fraud Schemes

Your business can be targeted by payroll fraud in many ways. One such way is through ghost employees, which are fake employees set up by a payroll firm. Ghost employees still get paid when employee checks are paid, meaning money is stolen from your business.

Another payroll fraud scheme involves falsified salary and hours. Fraudulent payroll providers increase the number of hours worked or increase the amount of take home pay to get extra money from your business account.

Commission stratagems are another issue to watch for with fraudulent payroll companies. These fraudulent payroll companies inflate commission amounts for random workers by falsifying information, such as invoices, sales records and other documents in order to steal money from you.

Keeping Yourself Safe

In order to protect your business from payroll fraud, take these steps to ensure your company is safe.

Increase cybersecurity: Line up virus and malware protection to keep your business safe on the frontline. Also keep passwords protected and change them frequently. Use different passwords for different accounts.

Have multiple accounts: If all of your business funds are in one account, hackers can access everything more easily. Rather, open separate accounts for payroll expenses alone to ensure you have the money you need to pay employees while limiting funds that can be stolen from you.

Conduct audits: Internal audits are a wise idea to conduct. Reviewing your financial records regularly to see where your money goes is a great way to determine whether there are any gaps or fraudulent activity.

Choose a payroll software company that has a history of quality service, a reputation for integrity and excellence as well as one that adheres to the Securities and Exchange Commission (SEC) regulations. It is also prudent to ask for proof of a certificate of liability insurance to ensure you are working with a payroll provider that takes your small business needs seriously. We at Precise Payroll do just that.