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Thought Leadership from the Leaders in Virtual Accounting and Bookkeeping Services

Avoiding Payroll Fraud Risks by Outsourcing (Phantom Employees)

Third party accounting companies aren’t just there to handle monthly bookkeeping duties. They’re also there to limit the potential fraud risks that are inherent when you hire an on-site staff comprised of people whose backgrounds you’re not 100 percent sure about. Granted, not every employee that you hire is going to be a fraud risk or a hardened criminal looking for a golden opportunity to abscond with your company’s money. But without putting in place strong and frequently monitored controls, that threat will always exist. Signing up with a company that can provide bookkeeping and payroll services online helps you minimize that risk.

 

Creating phantom employees is one way that a dishonest bookkeeper can steal money from under a company’s nose without appearing obvious. The addition of a couple of extra employees earning a full-time wage can be highly profitable for fraudsters and equally as costly to a company, especially once the checks have been cashed and the money spent. But this isn’t the only way that a company can be drained of funds – another method is through the continuation of payments and benefits for employees who have been fired or let go.

 

Both of these incredibly destructive and costly practices can be prevented by contracting a third party to perform monthly bookkeeping duties and payroll services online. Not only can you rest assured that the internal controls established by the outsourced accounting firm will prevent this kind of fraudulent activity from taking place, but you can also take comfort in knowing that all employees are background checked.

 

Security concerns over the transfer of documentation is assured through the use of scanners that enable the quick, encrypted transfer of information via email from one location to another without having to physically send documentation, yet another prospect that’s rife with risk. To learn more about how you can limit your exposure to fraudulent activity within your company, visit AccountingDepartment.com.

 
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