-Forward Thinking Leaders -

Latest Articles

  • 1
  • 2
  • 3
Ten tips for entrepreneurs to attract investors and secure funding

Ten tips for entrepreneurs to attract investors and sec…

Many excellent business ideas never get past the spreadsheet...

Avoiding the common pitfalls in African expansion

Avoiding the common pitfalls in African expansion

The rate at which local organisations have ventured into Afr...

5 ways to fight payroll fraud

5 ways to fight payroll fraud

Payroll fraud is one of the most common white-collar crimes ...


  • Accounting & Payroll (24)
  • Banking (15)
  • Budgeting (10)
  • Economy (33)
  • Financial Reporting (27)
  • Insurance (26)
  • Tax (19)
  • Trade & Investment (41)
  • Venture Capital (10)

The SA Leader Magazine

Digital July 2015 Cover

In the July issue


Where SA Cities stand in becoming world Class Cities

Keep IT secure - A checklist for Small Business

The death of HR - A Great HR Journey lies ahead


Stay connected

Finance Comments

  • love it I like this blog it's a master… By on Wednesday, 19 November 2014 13:28
    Regional Trading Blocs - the future of African prosperity (Trade & Investment)
  • extra resources Simply wanna input on few general things,… By on Wednesday, 19 November 2014 12:28
    Rules of tax governance in the new world (Tax)
  • Thandi I would like to know more about… By Thandi on Thursday, 07 August 2014 21:31
    Help at hand for SMEs accessing finance (Venture Capital)

Finance Tags

A+ A A-

5 ways to fight payroll fraud

Rate this item
(0 votes)
5 ways to fight payroll fraud

Payroll fraud is one of the most common white-collar crimes in the business world. For that reason, every business must put in place sound policies and processes to address this growing risk. Here are some quick tips on  how you can protect your organisation from this crime. 

1. Proper separation of duties

One effective way to mitigate the risk of payroll fraud in your business is to assign responsibility for different payroll duties to different people. For example, different staff members should ideally be responsible for capturing payroll data; for adding and removing employees; and for verifying the pay run and signing off the payroll. This gives you a clear audit trail, ensures a clear line of accountability, and puts strong checks and balances in place. In this sort of environment, someone should quickly pick it up when there's something unexpected happening in the payroll. This is a good way to prevent common schemes such as a fraudster in the payroll department adjusting overtime or leave for other employees in exchange for a kickback.


2. Invest in automated software

Given the complex nature of payroll calculations today even in a small and relatively simple business, automated payroll software is essential if you want to make sure that the figures are correct. A robust payroll software will reduce the possibility of human error in or tampering with your payroll - reducing opportunities for payroll fraud and enabling you to more easily provide accurate and timely information to SARS.


3. Bank account and ID number verification

There are many sly and subtle ways that dishonest employees might try to defraud you through tampering with the payroll. For example, one common scam is to set up a ghost employee with a fake ID number and a real bank account.


You therefore need to tick a few boxes when you pay a person on your payroll - that the person exists, that he or she is the person you wish to pay, that the bank account you will pay exists, and finally, that the bank account belongs to the person you intend to pay.  A good payroll solution will feature online ID number and bank account verification to enable you to do just that.


4. Look out for suspicious behaviour

When someone in your workforce is up to mischief, they often show a number of tell-tale signs. These include an unwillingness to take leave, getting to work early and leaving late even though they are not under unusual deadline pressures, and a sudden eagerness to work from home, out of sight. These behaviours don’t necessarily mean that an employee is committing fraud - there could be other explanations - but they do suggest that you should be a little more vigilant.


5. Keep a sharp eye open for forged payslips

Instances of criminals using payslips in identity theft are on the rise - the crook will present a fake ID book and payslip to secure a loan or buy a big-ticket item on credit for example. An expert eye can usually tell if a payroll slip has been tampered with. Still, we recommend that you always phone the company that issued the payslip to verify that the person who is asking you for a loan actually exists, works for the company, and earns what the slip reflects.


Closing words

Prosecuting someone for payroll fraud can be expensive and time-consuming, but we recommend that you file charges if you have evidence that an employee is guilty of this crime. All too often, fraudsters get away with moving from company to company to commit the same crimes because companies are reluctant to spend time and money to prosecute them.

Related items

  • Getting the most from your payroll & HR solution
  • How analytics is changing the way we prevent fraud
  • Compliance is key to hassle-free compensation in business
  • What can we expect from the 2014 budget?
  • How to align your payroll with the Employment Tax Incentive Bill
More in this category: « Real Wages, Productivity and Employment – Is South Africa’s Strategy Sustainable

Leave a comment

Copyright © 2015 gdmc (Geoffrey Dean Marketing Corporation cc). All rights reserved. Material may not be published or reproduced in any form without prior written permission. Use of this site constitutes acceptance of our Terms & Conditions and Privacy Policy. External links are provided for reference purposes. SALeader.co.za is not responsible for the content of external Internet sites.

Login or Subscribe

Facebook user?

You can use your Facebook account to sign into our site.

Log in with Facebook