Payroll fraud is a serious threat to every business, accounting for millions of dollars in losses every year. While businesses of every size are vulnerable, smaller companies often lose much more than larger firms, since they often don't have the resources to prevent fraud before it occurs and catch those who are responsible. The experienced CPAs at Fisher & Hodges CPA’s AC in Princeton, WV, urge every business owner to understand the risk of payroll fraud, and take the steps necessary to avoid it.
What Is Payroll Fraud?
When employees or contractors manipulate records to receive compensation they don't deserve, the consequences can be extremely costly and difficult to detect. Falsifying hours worked is an extremely common example of payroll fraud, especially in businesses with old-fashioned time-clocks or PIN-based login systems. Employees may have coworkers log in or out for them, potentially resulting in thousands of dollars in overpayment. Workers may even add a ghost employee to the payroll, allowing them to essentially collect double or triple wages.
Preventing Payroll Fraud
Fraud perpetrated by employees can go on for years, potentially resulting in hundreds of thousands of dollars in losses before it's detected. Having a skilled CPA handle your payroll can help minimize your exposure and find fraud before it costs you your business. Your CPA will also recommend payroll practices that can make fraud more difficult, deterring some employees who might be willing to take advantage of a vulnerable system. While payroll fraud is never 100% preventable, it can be detected early by an experienced accounting firm.
The professionals at Fisher & Hodges CPA’s AC have the skills and expertise to help businesses of any size avoid and prevent losses from fraud and theft. Visit their website to see how they can help you manage your funds, follow their Facebook for more tips, or call (304) 425-2470 to schedule an appointment today.