As we all know, changes in the world of small business are not only inevitable, they are also constant. More than likely, if you are an entrepreneur, you already have your hands full, just trying to get through your daily responsibilities. That’s one reason why The Payroll Department stays up with the trends. We want to always provide small business owners with the education and information you need. (more…)
One of our new clients explained his reason for outsourcing his payroll during one of the initial meetings he had with me here at The Payroll Department. We often hear how small business owners are eager to have someone else take care of payroll, payroll taxes and the payment and reporting of it to the government. They want to be sure they don’t make a mistake and end up paying out fines and penalties for an oversight. However, when Sam* talked about the problems of handling payroll in-house with his small business, he made no mention of those issues.
He talked about whispers and personnel problems.
Whispers between co-workers may indicate an issue. Co-workers spend more time together on a daily and weekly basis than most families. Certain people become close and sometimes, cliques or unofficial groups are formed. When employees become close, they share confidences and confidential information.
Confidentiality inside organizations, especially small business operations, can be a real challenge. When personal issues become community knowledge employees can be embarrassed, ridiculed and judged. And those type of situations can have a direct impact on production – quality and quantity – and therefore, the bottom line.
Sometimes alliances are divisive and “sides” are taken. That’s when things tend to spiral downward and confidential matters become valuable collateral.
One of the most difficult areas to manage confidentiality is in payroll. It’s not just keeping pay rates confidential, but keeping personal matters such as garnishments for child support or other court ordered payments private.
It’s not uncommon to discover that private information is shared with the general office in the form of gossip, whether it is intended to be malicious or not, gossip always ends up hurting the organization.
Outsourcing your payroll is one easy and affordable way to manage the confidentiality of payroll. In fact, at The Payroll Department it is a policy to only discuss payroll matters with specified people within an organization. We respect the private matters of each individual on your payroll as well as the overall payroll and payroll tax matters of your business.
Sam saw his outsourcing payroll as being a proactive step to eliminate the potential of divided employees. He said there are enough issues with personalities without adding the potential for explosive situations around very personal matters in the workplace.
We like his thinking and I bet his employees would like it, too, if they realized he was working to protect them. But he keeps that confidential.
No, we’re not implying your business is haunted and you’re paying salaries to spirits that may be hanging about. But your business could possibly have ghost employees of a different sort that you may not even be aware of if you don’t diligently monitor your company’s payroll.
Last year, Iraq’s new government found out they had 50,000 ghost soldiers on their payroll. These were actual soldiers who paid their officers a portion of their salaries and then didn’t show up for duty. Not only did this practice make their commanders richer, but it also weakens the country’s military force, leading to the ISIS takeover of Mosul.
If you’re thinking, “Well, that was Iraq. Something like that doesn’t happen in businesses in the U.S.” Think again. Just this year, a man who worked at the Knox County, TN, Trustee’s Office was jailed for fraud after he collected roughly $200,000 – four years’ worth of paychecks that he didn’t actually work for and yet received.
Unfortunately, ghost employees can exist within your company:
A manager hires a nonexistent employee, then deposits the paychecks into a bank account he/she has set up.
A payroll clerk leaves a terminated employee on the payroll, then keeps the paychecks to cash for personal use.
An H.R. employee sets up personnel and payroll files using social security numbers of people who have died and collects the salaries.
A vice president hires a son who never or rarely shows up to work, but still pockets the paychecks.
However, you can safeguard your company against payroll fraud – saving your company thousands of dollars in damages. By hiring a payroll services provider, like The Payroll Department, to handle your payroll, we can provide your company with another check and balance to your payroll processing system. If an employee is stealing money through your payroll, it would become more difficult if The Payroll Department was monitoring your payroll.
In fact, The Payroll Department requires all the paperwork of your employees and makes all the deposits for your payroll. If more than one paycheck were deposited to the same checking account, The Payroll Department would catch it and make you aware of the potential problem. Also, The Payroll Department notes all the social security numbers of your employees when making tax payments, so they’re more likely to detect duplicate numbers.
If your business doesn’t have checks and balances in place for your payroll, you could be setting your company up to be the victim of fraud. But, by outsourcing your payroll services to a third party group, like The Payroll Department, you can eliminate the possibility of ghost employees haunting your payroll. Call us today for more information.
So you’re thinking about opening a small business. Finally, you have found the perfect location. You have developed a strong business plan. Your family supports your decision to become your own boss. Have you thought about everything? (more…)
Everyone knows the importance of saving for retirement. Everyone knows that saving money consistently and giving it time to grow is the best approach to ensuring adequate funds for the post-retirement years. Yes, we may all know that we should be saving for retirement, but that does not mean that we are doing it. The fact is that setting aside money for the future is difficult. (more…)
Administration of payroll can be a daunting task with complex rules to follow and unpleasant penalties for not following those rules. But when you talk about payroll for a nonprofit organization, things can be even more complicated. There are some practices that are perfectly acceptable for a for-profit company but not for a nonprofit organization. (more…)
After serving their country, veterans often apply the leadership skills they have learned in the military in running small businesses. In fact, according to the U.S. Census Bureau, veterans own about 2.4 million U.S. businesses – that’s about 9% of all American companies. Additionally, veterans employ nearly 5.8 million people and manage $210 billion in payroll – a sizeable chuck of change! (more…)
Pay raises make employees happy, don’t they? Not only do raises make employees happy, most small business owners are very proud of their ability to not only provide employment, but also to increase wages. (more…)
Advances in medicine and improvements in safety have increased the life expectancy of Americans. People are living longer and staying healthier as they age. This has resulted in a new group of potential workers: people who have retired from their first careers but may not be ready to quit work altogether. Retirees make great employees. (more…)