Letting an Accountant Unmask The Ghosts in Your Payroll

Monday March 10, 2014

Although businesses may exert all efforts to fairly distribute pay to hardworking employees, some manage to receive an unjust share of the pie. Chris Bradford explains in his piece for the Chron small business portal:

“More than 11 percent of workplace frauds involve payroll, the average loss of such fraud was $48,000 and average schemes escaped detection for nearly 36 months, according to a 2012 study by the Association of Certified Fraud Examiners. The mere existence of internal control mechanisms is not enough; they must be monitored and enforced. Adherence to internal controls is the primary weapon for overcoming payroll fraud and minimizing its risk to business.”

Glendale, CA is the home of many reputable companies such as DreamWorks Animation and International House of Pancakes, all of which intend to maximize profit and reward their workforce with the proper wages. The presence of ghost employees, however, can hurt a company’s reputation as much as poor performance, warranting a need for an accountant from Glendale such as MASH Accounting and Consulting LLP.

The article suggests internal controls to stop the proliferation of ghost employees. In order to maintain a company’s success, payroll should not be overlooked and instead should be heavily monitored. Bradford hints, though, that the “ghosts” may have been created by employees with access to payroll records. For example: have you seen an employee’s deceased relatives on the payroll?

One way to deal with the crisis is to temporarily limit access to the salary records to only two designated people. In certain cases, Bradford suggests not letting the employees computing payroll rates and hours write the checks; they may be required to submit lists of new employees for management approval before insertion into company databases. A professional payroll specialist can help reconcile the list of active employees and check with a bank that handles the company’s payroll account.

Outsourcing your payroll to a Glendale accounting company like MASH can help limit the damage. In turn, you give the right employees their fair share of wages.