Check fraud is unfortunately all too common. All a criminal needs these days to make your company a victim is a computer, some basic knowledge and access to your checking information. To make matters worse, if a fraudulent check gets past your bank, your business – not the bank – is typically held liable for the losses. To help our clients, prospects and others prevent payroll fraud, JLK Rosenberger has provided some tips below.
Direct deposit is best
How, then, do you prevent payroll fraud? One way is to encourage or require your employees to use direct deposit. Not only is direct deposit more convenient — and free — for employees, but it also ensures that no one can cash a bogus check.
But for employers who hire workers without bank accounts, such as seasonal, migrant and recent immigrant workers, direct deposit isn’t as accessible. Some banks, seeking to reduce their fraud risk, have begun offering “unbanked” employees direct deposit programs at their worksites. Rather than being deposited into a traditional bank account, paychecks are credited on an ATM card or paycard.
Using this type of program means that your payroll account number is no longer distributed around check-cashing outlets. Also, you don’t have the hassle and cost of distributing checks, replacing lost checks and buying paper checks.
If you still use paper …
If you can’t eliminate paper checks entirely, try to limit the number of authorized check signers in your business. Also, use a “positive pay” system that allows your bank to verify all the checks presented for payment on your account. Further, unless you’re writing hundreds of payroll checks, don’t use an automated signature. Real signatures are more difficult to forge.
Another option: Outsource your payroll processing. Not only can an outside payroll service save you time and money in calculating and issuing checks, but it moves the entire payroll process off site. This way, employees have fewer opportunities to falsify or forge a payroll check.
Payroll check scammers are more sophisticated these days, but you can fight technology with technology. The same advancements that have made check fraud easier for perpetrators can also prevent these scams. JLK Rosenberger has the knowledge and resources to help your company prevent fraud or implement the necessary safeguards if you have already been a victim. Call us at 949-860-9902 or click here to contact us. We look forward to speaking with you soon.