Audits can look scary to people, as they see them as an inquiry when a discrepancy is found in the financial records. It is true, though, that payroll audits are usually conducted internally to ensure that the business owners’ financial statements are accurate.
Furthermore, they are performed by an official within the company. A payroll audit ensures that the transactions are made accurately and with sincerity. The audit procedure can take weeks or sometimes just a few minutes. It depends on the kind of organization it is, usually dependent on the size of it.
Another thing is the extent of an audit. In Tulsa, you get to see diverse industries, and therefore, the importance of payroll audits cannot be overlooked. You must also ensure that you are not getting yourself into trouble, as penalties and liabilities can be there if any discrepancies are found.
You can reach out to bookkeeping services in Tulsa to make sure all the records are accurately kept. It will reduce the need for audits as well.
Why are payroll audits conducted?
- They are conducted to ensure that taxes are accurately reported.
- Another objective is to ensure compliance with the tax laws and employment laws of Tulsa.
- Employees would get accurate data about their payments.
- Looking for the errors and discrepancies and eliminating them.
How can you conduct an effective payroll audit?
Have a fixed period for your payroll audit
Make sure you have a predetermined timeline for conducting a payroll audit. It can be a day or for the whole year.
Go through the data of employees
In this step, you want to make sure that the data given to employees matches the payroll data. If it matches perfectly, you can be assured that there are fewer chances of errors. You also need to ensure that the payments are being made to an active employee of the organization. You must also ensure that the ones on leave also get their paycheck.
Go through the working hours of employees
It would help if you looked into whether the amount paid matched the number of working hours. It is especially significant for those who work on an hourly basis. If you notice that many employees have the same time cards, you need to inform the company’s HR. It can be a sign of discrepancy, as someone might be making changes to the time cards.
If you notice an atypical payroll transaction, document it
If you notice the employee has been getting a lot of reimbursements (an act of compensation) but does not go out or travel a lot, it might be a potential sign of a discrepancy or fraud. Such acts are at high risk of fraud.
Run an inspection through the bank accounts
Check if your payroll records are in sync with the bank statements. Make sure you are double-checking everything, as there is a scam going on. The scam is basically when the payroll mistakenly deposits somebody’s salary into some scammer’s bank account. Therefore, you must look into this to avoid any potential risks.
Share the findings of a payroll audit
Once you have made the report for the payroll audit, could you share it with some people? It can include people like the head of finance. If you conduct audits regularly, you are less likely to get into big troubles such as lawsuits.
Look for the areas that need improvement
If you find any errors or discrepancies, try not to repeat those mistakes and work on those errors. Automation is becoming increasingly popular nowadays, helping to deal with inaccuracies.
Hire a bookkeeping service to avoid potential errors!
Getting in touch with a professional can help you to mitigate the risks of discrepancies and possible errors. A bookkeeper can maintain accurate financial records for you. They also ensure that your business is adhering to the different laws.
