2 Types of Fraud Businesses Need to Watch For

When most people think of employees stealing from their employment, they imagine someone raiding the supply closet and hauling boxes of pens and stacks of legal pads home with them. Payroll fraud (including ghost payroll and timesheet fraud) is a more costly sort of fraud that occurs in businesses of all sizes across the country.

Ghost Payroll

Do you compensate people who don’t truly work for you? You could be surprised. The second most common sort of fraud is ghost payroll, which is frequently perpetrated by your payroll staff or manager. In a nutshell, a ghost employee is either a fictitious person who has never worked for your firm but was “created” by payroll to drain funds or a former employee who left but was never legally terminated in the payroll system.

Timesheet Fraud

Paying employees inappropriately for the hours they work is known as timesheet fraud. Employees may have a coworker clock in and out for them when they aren’t even scheduled to work; in other situations, corporations overpay employees based on fraudulent timesheet entries.

One typical timesheet scam is for an employee to “forget” to clock in or out, necessitating a manual input, to which they then add excess hours. In other circumstances, a payroll clerk may be complicit in the plan, manually altering employee timesheets to boost the number of hours worked or even the pay rate.

Payroll fraud is expensive for your company. It’s critical to keep track of who’s getting paid what and to ensure that employees are getting paid what they’re worth. Furthermore, if your payroll is exact, you can concentrate on keeping those paper clips from escaping the supply closet.