How to Protect Your Business Against Fradulent Payroll Providers
Many businesses, small or big, are suffering from a different kind of pandemic today: payroll fraud. A record 27% of businesses the world over are currently under attack from this accounting fraud. While this fraud can be typically traced to workers with ill intentions working within a business, it is often advised to hire the services of a professional payroll provider.
Payroll providers are expert agencies that offer effective and safe payroll processing for businesses. While they are tasked with navigating all the intricacies involved in payroll systems, can they really be trusted with your company’s financing?
While there are reputable payroll providers like Consultants In-A-Box out there to entrust your business payroll processing, we can’t help to disclose that there have been a couple of bad eggs in the business, soiling the hard and success of good payroll outsourcing companies.
In this article, you will learn how these fraudulent payroll providers operate and how you can prevent your business from one.
Causes of Payroll Fraud
Fraudulent payroll providers cripple the finances of many businesses through the following methods:
- Ghost employees - If your business is fairly large, it is tasking to know all your employees by name or the actual number of your staff size. Fraudulent payroll providers exploit this common flaw by creating a fictional worker(s) and inputting their information along with genuine workers on the payroll list. The company ends up paying that ghost worker’s salary which is collected by the payroll providers. In some cases, these providers may use the names and details of former employees to trick businesses into paying them.
- Falsification of timesheets - Some fraudulent payroll systems deliberately increase the number of work hours by a staff (whom they must’ve connived with) to have a bigger paycheck.
- Payroll impersonation - Fraudulent payroll providers may ask your employees to update payroll data through a phishing website made to look genuine. They’d steal this information and make alterations to it on the genuine website.
- False commission - It’s commonplace to see some businesses giving commissions to employees. A deceitful payroll provider can deliberately increase the commission of workers to make them earn a larger pay. This stunt is pulled by illegally increases the target sales and other marketing bonuses.
With the aforementioned ways in which businesses can be affected by fraudulent payroll providers, how do you ensure your business is well protected?
How To Protect Your Business From Fraudulent Payroll Providers
The steps below will guide you on how to prevent payroll fraud from scandalous providers:
- Properly vet payroll providers. This is the important step to make before hiring a payroll provider to handle your company’s payroll. Ensure that they’re adhering to the regulations of the SEC and can also provide proof of their liability insurance. Also, ensure that their customer service is top-notch. Your business deserves nothing short of the best.
- Check out reviews. When selecting a payroll provider to work for your business, you should the internet for user reviews. Reviews reveal a lot about a payroll provider you’re planning to work with.
- Request for further certifications. You need to request for further verification from governmental agencies before hiring a payroll provider.
We at Consultants In-A-Box take pride as permanent solutions to your business’ payroll problems. We combine professionalism with a wealth of experience to deliver the very best for your employees and business. Do reach out to us today.
- Jordan VanMaanen