When you’re running a sizable company, you can become vulnerable to a variety of fraud schemes, particularly in the payroll department. If you don’t use a Certified Public Accountant or CPA, these tricks can be challenging to detect. Here is a guide to some of the most common scams that affect companies, so you know what steps to take to protect your business.
What Are Typical Examples of Payroll Fraud?
1. Ghost Employees
This common scheme is when the payroll staff lists a fictional employee as part of the corporation. The schemers then make that employee’s payment out to themselves so they can collect the money. This problem is especially prevalent in big companies where it’s difficult to know everyone’s face and name. However, this method can be circumvented by having a CPA audit the payroll list every year.
2. Pay Bumps
Everyone wants a raise, and some employees want it so badly that they team up with a payroll staffer to give their salary an unearned boost. To disguise the move, the staffer may periodically lower the raise at certain points to throw any onlookers off the trail. With a CPA monitoring the situation, such discrepancies and surprise fluctuations can be quickly spotted.
3. Time Theft
When employees report their work on time sheets, they will sometimes try to misrepresent how many hours they worked or have a friend clock them in when they’re not at the office. For this scam, one of the best methods at deterrence is having occasional reviews where employees account for their hours while also broadcasting severe penalties for lying and falsifying time sheets.
To protect yourself from payroll fraud, hire a trusted CPA like Young Hoy & Burnett CPA in Texarkana, TX. In business for over four decades, the professional accountants have earned a reputation for being both extremely trustworthy and discerning. The payroll service professionals will help you implement a system to catch any mistakes or deceptions. You can receive a consultation by calling (903) 794-2211. Learn more about these Certified Public Accountants by visiting their website.