As a small business owner, you know it’s a complicated task to manage payroll. It’s a smart move to get some support and outsource the payroll with the fear of entering incorrect information and mistakes that lead to heavy fines.
We’ve discussed previously what you need to know when setting up payroll, but now we’re going to let you know how to check for fraudulent payroll companies. Not all payroll companies are supposed to be equal, so it’s important to know who’s legitimate and take into account the best interests in your company.
Understanding payroll systems
There are multiple ways to protect your business when it comes to payroll fraud Some of the most common methods are:
Ghost workers: one or more fake employees may be set up by a payroll company. Such ghost workers will still be paid when paychecks are issued, which is money that has been robbed from your company.
Commission strategies: payroll can get tricky when it comes to employees who earn a commission. Fraudulent businesses take advantage of this by falsifying sales records, invoices, and other financial documents by inflating payment sums for certain employees.
Falsified hours and wages: Similar to inflating commissions, dishonest payroll companies may raise the number of hours worked or take-home pay to take more money out of your company.
Besides these schemes, it is necessary to detect any suspicious behaviour of the employee. If any of your employees have access to your online payroll provider, they can easily change their salaries as well as any other employees to make sure they get more in their paychecks. Furthermore, if you offer reimbursement of expenses, but not any documentation, employees can say their expenses were higher than they were. While you’d hope your employees use the honor system and are people you can trust, these situations can occur, so make sure you only share your payroll login with your trusted employees.
How to Stay Safe?
Now that you know what to keep an eye out for, it is important to take additional steps to ensure that your business is safe.
Improve efforts in cybersecurity: Getting viruses and malware protection is the first step in keeping the business ‘ online operations secure. This software can prevent your business from having serious problems. In addition, keep passwords safe, change them regularly, and try not to use multiple accounts with the same password.
Preform internal audits: You review financial records to see where the money is going if you do an internal audit of your business. Some loopholes, whether internal due to workers or external to corrupt firms or hackers, can be a sign of fraud.
Have more than one account: It can be easier for hackers to steal anything if you have all of your company funds in one account. In opening a separate account for your payroll costs alone, you will make sure you have enough money to pay for your workers and restrict funds that could be compromised.
Conclusion:
We take business needs seriously at Nuage Digital. When choosing Nuage Digital for your payroll needs, we ensure that your taxes are properly filed and that your information is safe to prevent hacking.