Discover what may cause the risk in payroll. Read in what way control of wages and payroll, over check payments should be done.
Payroll Risks and Control
Payroll Risks and Control

Risks associated with payrollrisks
• Financial loss through invalid or unauthorized payments including rascally ones.
• Low morale because of default to make payments quickly.
• Inexact payments start discontent and potential financial loss through delays or mistakes in payroll records.
• Censure or fines by the tax authorities because of incorrect calculation or payments.

Control of payroll and wages
• Consequently with the organization's procedures and legal requirements, there should be written sanction. It has to authorize employing or discharging any employee.
• A senior member of staff should allow the changes in rates of pay. He doesn't have to be involved with the payroll.
• The same we may say about overtime work that also should be permitted by a senior member of staff who is not involved with the payroll.
• The payroll should be checked and signed by an independent member of staff.
• Two signatories should sign and check the wages cheque against the payroll entry.
• Some form of time recording should be used there where pay relates to hours at work.
• They also should sign and check direct bank transfers. It has to be done regularly against details on personnel files.
• In case an employee has been absent for a significant period, their entitlement to salary should be checked against personnel details.
• Personnel records should be kept for each employee, giving details of engagement, retirement, discharge or resignation, rates of pay, holidays etc with a sample signature of the employee.

Payroll Risks and Control >>