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How to protect against payroll fraud

Payroll fraud is something to be avoided at all costs, but it effects thousands of businesses every year and can cause devastating losses as a result. Last month, a report by CIPD people management revealed the extent of this, causing £12bn to be lost through payroll fraud per year. Often payroll fraud occurs without organisations realising, through minor but regular inflated expense reports or claiming extra hours of pay for work that are not completed – the latter of which is much more likely when managing a remote workforce that relies on a system of external timesheets. If you’re worried about being effected by payroll fraud or have experienced it already, there are steps you can take to lower the risk of it happening to you and your company again.

Prevention before cure

An employee may attempt to trick the payroll system if they feel that they are not being paid fairly for their work, or if they have experienced problems with receiving they salary on time in the past. Operate a culture of transparency that is based on trust by welcoming negotiations for a pay rise if a staff member feels this way, and stay organised with a reliable time management system that will help you to ensure your workforce is paid the amount they are expecting, on the day they are expecting, month after month.

Policy

Something small but effective could be to create a written policy about honesty in regards to timekeeping, that is to be followed by your workforce. State that members of staff are to be truthful when logging their shift data, but also publicise a ‘two-way’ system, ensuring employees to always return this honesty by being committed to paying them fairly.

Prioritise

Payroll fraud that occurs through a false timesheet can happen intentionally, yet sometimes wrong data can be submitted due to forgetfulness. When relying on a system that requires staff to fill in a timesheet after a shift has been completed, there is lots of room for error. Switching to a real-time workforce management solution can prevent this from happening. IQTimecard is one of these technological tools, and whether it is used on the mobile app or via a call-log system, employees log their arrival and departure data as and when it happens. A solution like this creates an instant, virtual connection between a workforce and management, also creating an environment that feels more under control and surveillance, no matter where the physical location, encouraging less people to fill in false data.