Protect Company Assets from Fraudulent Activity

How to Avoid Payroll Check Fraud

iStock_Fraud Words_SmallMany organizations in today’s business world have encountered employee theft and other fraudulent activities.  Even with security measures in place to protect themselves, there is always someone who, with enough motivation, will go to extreme means to crack the code.

Employees are finding clever ways to get paid twice or even three times.  One of the recent methods is by using electronic deposits and check cashing stores to get the funds before the other institution is aware that the check has already cleared.  Poor paper trails give the employee an advantage to get away with it, albeit usually in conjunction with disappearing.  Checks sent in the mail are left wide open to skillful cons that are accomplished in the art of duplicating checks.   So what can employers do to protect their company from fraudulent activities that cost them valuable assets?

Outsourcing Payroll Services

Outsourcing payroll services to an SSAE16 Type II (formerly SAS 70 Type II) certified company is one way to protect against fraudulent activities.  Representatives often undergo background checks and advanced screening processes.  In addition, offices are secured by alarm codes and many areas have restricted access.  Checks and reports are confidentially and securely generated and can be delivered with specific instructions or electronically in a password-protected file.  The SSAE16 audit also ensures that the organization’s processes and procedures are thorough and that they include checks and balances. 

Outsourced payroll services can also provide additional protection through various products and services offered.

Products and Services to Consider

Direct deposit is probably the most popular method of paying employees.  Most companies and employees prefer this method due to the speed and automation of the process.  Check stubs can then either be printed or provided to employees electronically to meet labor law requirements. 

Pay cards are another common option.  Pay cards are essentially reloadable debit cards personalized with the employee’s name and security pin. Payments are sent through the direct deposit process and credit the employee’s pay card balance on the day of the check date.  The card can be used as a debit card, or money can be withdrawn at an ATM.

For those that prefer to provide employees with live paper checks, a Positive Pay program is a safe and secure way to ensure that the bank only clears checks that are approved by the organization.  Once payroll has been processed, a list of the check numbers, payees and amounts are provided to the bank, and anything presented to the bank outside of that list is rejected.  Most outsourced payroll services can provide this service and can benefit the client through time savings as well. 

Investing in outsourced payroll services and alternative payment solutions are two of the most logical choices to help prevent employee check fraud and illegal payments.  For increased peace of mind, put your trust in a service that is also SSAE16 Type II certified.  PAYDAY Workforce Solutions is SSAE16 Type II certified and can provide direct deposit, pay cards, positive pay solutions and more.  Contact us today to increase your organization’s line of protection against fraud.

 

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About the Author:

As Director of Operations, Jessica oversees the day-to-day operations for payroll, human resources, tax, finance and client affairs. She also plays an active role in formulating corporate strategy and developing client programs. Jessica believes a company’s success begins with its people. She strives to build a team encompassing excellence and professionalism, and to play a large role in developing the staff on an ongoing basis. Her passion for strong client relationships drives her in ensuring that clients receive the highest level of personal service and the best products in the industry. Jessica joined PAYDAY in 2004, and quickly advanced to Development Coordinator in 2006, when she took charge of Human Resources. She was promoted to Director of Operations in September, 2011.

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