Payroll fraud is a very common practice that happens in about 36% of businesses, whether you are using a payroll service or not. It can take as long as five years to be caught and once it is, it is usually very difficult to reverse the damage already inflicted on the business and all the money that was lost and taken away. This is why it is very important to actually monitor payrolls this site can help you to ensure that there is no money being spent wrongly. Knowing that it is very common and perhaps unavoidable what are the ways to avoid payroll frauds.
First, know how fraud happens so you can figure out how to catch it
You do not need to work with the best payroll service Australia has to know that there are two common types of payroll fraud that are most likely to be happening in your business.
The first one is falsifying time card data. This is basically when employees register more hours on their time cards than they are actually in the office. This way they end up being paid more money for hours that they are not working, hence costing the company unnecessary loss of money. This is often possible in big companies where keeping track of the presence of all employees is more difficult and less evident. However, if you find that this is happening often you may want to see if there are others who are covering up as well.
The second is ghost employees, that is when people working on issuing payrolls create accounts for non-existing employees and pay them while funneling the money elsewhere. In big companies, it is very difficult to actually catch that due to the large numbers of payments issued.
Proper and constant monitoring
To avoid those forms of payroll fraud, a company owner should be constantly monitoring the payroll service hired to deal with payrolls and verify the employees, for this purpose you can read our blog post here http://www.live-forex-easy.com/5-reasons-why-you-wont-find-the-best-payroll-professionals/ their names, positions and hours of work. This will show that the company is attentive and prevent them from causing any fraud in the future.
The third form of payroll fraud is registering an employee as a contract or independent employee, which is often self-inflicted by owners in order to avoid paying certain taxes, employment benefits and insurances. This can lead employees to falsify some data on purpose so they can get more money. Furthermore, if caught by the tax services, the company can face huge fines and penalties. Often times, it is not worth it because the savings are not major and in this case employees are less likely to be resentful and want to do compromise the position of the company.
Fraud is serious and can cost you overall a lot of money. Monitoring is very important to ensure that your business is working on its best performance but also to make sure that you are not losing money unnecessarily and facing problems with the government and tax services without any real benefits for you in the long term. Look into one of the many payroll services Australia has to clear any doubts you may have.