February 10 2018
If you’re a business owner or manager you’ll probably agree:
Payroll is one of, if not the most, significant costs associated with running a business.
Fortunately, there are a few strategies you can implement that will help reduce this cost, and make you business more profitable.
By tightening up time card reporting, even a small business can save hundreds of dollars a week. As you well know, this saving adds up.
With this in mind:
Here are some simple but solid strategies to help you both prevent and identify payroll fraud, and ultimately take action against it.
What do we mean by an ‘exact time method’? Basically this means doing away with rounding.
Whether it’s recording times to the nearest 15 minutes or 30, these minutes ‘either way’ can really add up, particularly if an employee is regularly rounding up.
This sounds simple enough, but there is a catch: How do I calculate the hours for payment?
If you are still using a manual timekeeping approach, one of the real benefits of ‘rounded’ times is that they are much easier for you to calculate.
This is the classic dilemna of manual timekeeping. Although the first example is much easier to process, in the second example the employee almost worked a quarter of an hour less, however using the rounding method they would have been paid the same amount.
Now imagine this for every employee every day, and it’s not hard to see how hundreds of dollars can be lost to this rounding method every week, especially if an employee is deliberately rounding up.
Buddy punching is the practice of clocking in or out on behalf of another staff member. This can be one of the ultimate forms of time card fraud, as it can be done to reflect a staff member was at work when they weren’t.
Surprisingly, even with tools such as modern P.O.S. systems this is still a hard problem to solve, as anything where a pin is used to clock in or out can be easily forged by another staff mate.
Personal Accounts to the rescue!
By tying the ability to clock in or out to an online profile, whether it be in a smartphone application or a web browser, buddy punching suddenly becomes much more difficult.
With a system like this, the only way to perform buddy punching would be for one employee to log out of their own account, log back in using the credentials of their friend, perform the clock in or out, and then log out and back in as themselves so that they can continue to clock in and out.
You get the idea...
Although not impossible, this is a much harder thing to do on the way out the door than simply entering a colleague’s pin number, or writing a time next to their name.
It sounds obvious that a staff member should have to clock in and out From Work, but in a busy workplace this can be hard to enforce, and can often result in employees ‘phoning in’ their hours remotely, a practice that is very open to fraudulent reporting.
But here's the thing...
We have these things in our pockets called smartphones, which happen to be fairly good at recording locations.
By using Applications that leverage the GPS of a smartphone, employers can record the location of clock ins and clock outs, and have a much better idea of where the employee was at both times.
We hope that you found these tips useful. Please let us know about your own experiences with payroll fraud below in the comments!
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