Statistics indicate that fraud associated with payroll data comprised over 10 percent of global corporate fraud cases, with enterprises suffering an average loss of approximately $50,000 annually. While $50,000 may not be much to Fortune 500 and 1000 companies, it can cripple small businesses and if trends continue, this amount is expected to grow. Below are some steps to ensure that your company doesn’t become victimized and can safeguard your payroll data.
Secure Company Computers
Each year, a tremendous amount of company data is stolen or lost as result of data breaches. Hackers spend lots of time trying to penetrate networks and computers which contain valuable information, which is why it is so important to secure them. Employers must teach their employees to secure their work stations at all times and take steps to ensure their mobile devices are not compromised.
Some of the ways in which this can be done include the installation of firewalls, spam filters to block unsolicited email and proxy servers to better control internet access. Employers should regularly update security software to make sure they have the latest editions and workstations should be secured with robust passwords which are a mixture of symbols, numbers and lower and upper case letters. Encryption is a necessity for the most sensitive info.
Inform Employees About Phishing Schemes
Phishing schemes come in the form of official sounding emails which are designed to acquire sensitive information from the recipient. They may appear in the form of bank notices or other official sounding emails when they are anything but. One way to determine whether or not an email is genuine is to view the “reply to address” which will reveal that it isn’t the email address of the company or institution in question.
Split Payroll Among Multiple Workers
Unfortunately, one of the greatest sources of payroll fraud is the human resources department itself. Employees that work in HR have access to extensive amounts of information, a lot of which is sensitive and potentially damaging if it falls into the wrong hands. One way to reduce the chances of this happening is to split payroll processes among multiple employees as opposed to concentrating everything in the hands of a single individual.
For instance, one employee could be responsible for monitoring time cards, while another would authorize payroll, another employee would generate it and another would send it out. This reduces the chances of fraud and makes it easier to identify the culprit should it occur.
Due to advances in technology, many companies today offer direct deposit rather than payment by check, but for businesses that are still paying employees by checks, they should never reveal the employee’s social security number on the pay stub. Stocks of blank checks and checks which haven’t been distributed should always be placed in an area that is secure, and it is also a good idea to send positive pay files to banks electronically on a daily basis, which will include the valid checks that you have drafted so that you’ll help the bank avoid fraud as they will block the cashing of any checks which are unauthorized.