Payroll helps to run the business smoothly. It may not be about only paying people on time. With the right system in place, you can save a substantial amount of time and money. Additionally, your employees will remain happy and content. It will be a wise decision without any doubt. However, the payroll can go wrong sometimes. On occasion, it can create a huge impact. Due to fraudulent activities, your finances may drain out without your knowledge. Human errors in account management can escalate and result in costly fines. It is essential to have the proper employee payroll solutions to avoid payroll-related risks.
Here are payroll risks that you should steer clear of.
Risks That You Must Avoid
Timekeeping Fraud
If an employee works from a remote location for a small agency, it may become essential to log in to the system on a daily basis. Later on, it is necessary to submit the record. On occasion, there may not be any automated systems, just a spreadsheet. Therefore, the employer or the manager needs to trust the employee completely.
When an employee forgets to log hours and later adds a few hours to be safe, it can lead to significant overpayment over time. Here, it is considered to be a timekeeping solution. It may be unintentional at times. However, some employees may also do it intentionally.
Solution
Time tracking tools can automatically record the time spent on tasks. Therefore, there will be no need to guess anything at all. Manager approvals help to avoid inconsistencies. Regular audits can help identify patterns in cases where individuals are claiming overtime without proper justification.
Fraudulent Expense Claims
When an employee needs to meet a client outside the office, they must submit expenses, including train ticket costs, taxi ride costs, and lunch expenses. Here, the person may sneak in the dinner expenses with friends, which may not be part of the work. If there is not much scrutiny, these expenses may be reimbursed fully.
Solution
The company requires a clear expense policy to prevent long-term issues. It is essential to inform employees about what is allowed and what is not. For every claim, a receipt must be provided. It ensures that there are no made-up costs. Regular audits can help to find suspicious claims. Expense management software can add a layer of protection. Therefore, you can use them to get additional benefits.
Cybersecurity Threats
Sometimes, HR from a company may receive a request from the finance director for the latest payroll documents. On occasion, it is natural for HR to fulfil the request without thinking. However, it can be a phishing scam. The sender in question may not be the finance director. Therefore, the data may fall into the wrong hands.
Solution
To address these criminal activities and cybersecurity threats, it is essential to have a robust payroll security protocol. Data encryption can ensure that the data cannot be read even after it has been intercepted. A multi-factor authentication system is an effective way to avoid issues.
A high-quality employee payroll solution can help to eliminate these issues. Northumbria Payroll Solutions can offer an effective solution to address the situation. Cutting-edge technology makes the payroll process compliant, accurate, and stress-free.