Fraudulent time and attendance is a far bigger issue than most suspect. Each year, businesses of all sizes report fraudulent time and attendance among their workforce. Figures from the Kentucky CPA Journal revealed that time and attendance fraud costs U.S. companies “more than $400 billion every year in squandered work productivity.”
Fraudulent time and attendance occurs if an employee accepts wages from their employer for time that they haven’t actually worked. This fraudulent activity can occur in several different ways: buddy punching (an employee punching a time card for another), employees lying about work hours, or employees taking an excessive amount of untracked breaks from working.
Fortunately, various entities have been investigating different ways to reduce fraudulent time and attendance activity at companies of various sizes. Let’s examine three different suggestions to potentially reduce fraudulent time and attendance at a company.
Do Routine Internal Audits
An internal audit may have the potential to successfully quell issues with suspected time and attendance fraud. Although an internal audit for employee time and attendance does require delegated work resources, it’s a necessary expense to reduce the possibility of fraudulent time and attendance within a company.
Internal audits can vary based on how a company undergoes the process. Most of the time the process consists of gathering a company’s time and attendance data on a regular basis; later, this data is compared against data gathered from an earlier period to examine lapses in employee attendance. Depending on how a company approaches their internal audit, the process should help them find if there are any lapses in regular employee time and attendance.
Implement an Automated System
An automated time and attendance system collects, manages and processes attendance and time data for companies. It’s perhaps the most widely used solution against time and attendance fraud in companies. In fact, an automated time and attendance system is said to help “eliminate manual processing, provide accurate reporting and stop payroll inflation.”
Data from the American Payroll Association revealed that “75 percent of companies who began using an automated time and attendance system eventually gained a 250 percent return on investment within five months of using the system.”
Consider Biometric Clocks or Cameras
Biometrics can be another effective solution for fraudulent time and attendance within a company. Biometric hand clocks help eliminate buddy punching and provide a reliable and efficient solution for tracking employee time and attendance. Installing a biometric hand clock or camera is also said to reduce the amount of manual paperwork, in addition to business expenses associated with such work.