Payroll security and payroll information protection are critical to the financial well-being of any business and their employees. A secure payroll system reduces the risk of external threats such as data breaches, and internal threats such as time sheet fraud.
What is Payroll Security?
Payroll security is a process to ensure employee and company information is secure and not exposed or compromised, by any third party from within or outside the company.
Why is Payroll Security Important?
A secure payroll system will deliver on-time and accurate paychecks to your employees. Delays in payroll processing or announcing a data breach in your internal payroll process can lead to employee disengagement and concern about the health and security of the business. Properly securing the payroll function is one step in safeguarding access to the company’s overall monetary information, such as banking and financial information. A data breach revealing your employee’s personal information, such as social security numbers and banking information, could have long-term effects, both on their credit and personal lives.
Why is Payroll Security Important?
A secure payroll system will deliver on-time and accurate paychecks to your employees. Delays in payroll processing or announcing a data breach in your internal payroll process can lead to employee disengagement and concern about the health and security of the business. Proper payroll security is one step in safeguarding access to the company’s overall monetary information, such as banking and financial information. A data breach revealing your employee’s personal information, such as social security numbers and banking information, could have long-term effects, both on their credit and personal lives.
6 Ways to Improve Payroll Security
Are you a small business owner handling payroll and taxes? Here are some steps you can take to help safeguard your employee data, business information, and improve payroll security.
Designate one payroll administrator: First and foremost, limit payroll access to one designated employee, payroll specialist or HR Manager.
Train employees on their role in payroll security: Train employees on how to use payroll (time tracking, employee access to their information, etc.). This helps everyone understand built-in security features. It’s also an opportunity to train relevant employees on additional steps that must be taken to protect sensitive company data and employee records such as Social Security numbers and addresses. Business owners can also strengthen payroll security by examining how employees may cut corners and the bad habits that form around payroll security procedures. (fitsmallbusiness.com)
Institute best practices to enhance security: Introducing security policies such as frequently changing passwords, adding two-factor authentication, and migrating your systems from locally stored to cloud-based storage can significantly increase security of payroll information, and protect payroll information from internal and external factors.
Segregation of duties: This simple rule applies to many financial and banking functions within the company, including payroll. For example, some businesses opt for one employee to manage timecards, have someone else handle payroll, and have a third employee issue the checks. Not only does segregation of duties discourage employee fraud, but it also reduces the likelihood of errors. (fitsmallbusiness.com)
Update your payroll software frequently: There is a reason technical giants such as Apple and Google release updates for their programs and products. Most updates are to ‘correct a breach and perform security upgrades.’ Set reminders to run updates on your payroll software if the provider does not run them automatically for you.
Perform regular payroll audits: Payroll audits should be conducted monthly and quarterly, and at a minimum, annually. The audits ensure that employee information is updated and correct, and timecards are checked against payroll
records.- Business owners have traditionally performed payroll duties because they thought it
was cheaper, easier, and more secure. The reality is that payroll can be more securely
provided using a third-party payroll provider. Companies that employ an HR or payroll
specialist can still benefit from utilizing a secure system to replace an antiquated
manual system.
Outsource Your Payroll Process
Business owners have traditionally performed payroll duties because they thought it was cheaper, easier, and more secure. The reality is that payroll can be more securely provided using a third-party payroll provider. Companies that employ an HR or payroll specialist can still benefit from utilizing a secure system to replace an antiquated manual system.
Choosing a Payroll Solution
Payroll security starts with payroll processing. A qualified payroll service provides a safe and secure method of paying your employees and ensuring all payroll taxes and fees are paid. At Capital CFO+, we handle your payroll through our approved payroll partner, ADP, ensuring that your employee and payroll information is kept secure. Capital CFO+ payroll services offer you the best of both worlds: the personal service and commitment we are known for, backed by big company clout and resources. It’s one more thing that Capital CFO+ does for you, so you can focus on growing our business.
Resources: fitsmallbusiness.com, adp.com
About Capital CFO+
Capital CFO+ LLC is based in Saratoga Springs, New York, providing bookkeeping, accounting, and CFO services. Capital CFO+ helps small firms access the economies of scale, efficiency, and expertise that large companies enjoy. Visit Pearl, our branch manager at capitalcfollc.com, or LinkedIn for more information.
