When you start a business, it may be so small that you’re able to pay your employees of your own accord. This may sometimes mean a little delay in payment (like, not on the 25th of the month), but at least you now who is getting paid and how much.

Then, as your business grows, you give more responsibilities over to others and before you know it, BAM, you don’t even know who is being employed because the HR department is doing it all for you.

Sure, having an HR department / representative is pretty rad – but did you know that there is such a thing as payroll fraud, and that it’s quite the lucrative business?

In an opinion piece for iol Yolande Schoültz a risk and fraud manager gave a few tips on how to notice if someone is up to no good:

 One of the biggest tips for small business owners is to become suspicious if a member of your payroll department never goes on leave, arrives early and leaves late. This should raise a red flag as this person may be taking steps to ensure that nobody else does their job and cannot discover their crime.

That could also mean they’re just working hard, let’s not be too hasty.

But hang on, what about employees that don’t exist? She gave an example of just one situation:

The hardest type of payroll fraud to orchestrate and detect, but also potentially the most lucrative, is the engineering of a ghost employee. The employee that is created is either fictional or could be a real person who doesn’t work for the company he is being paid by.

I recently worked on one of my biggest fraud cases yet, where an HR manager defrauded the company. He orchestrated this by creating ghost employees where he made changes to 11 bank accounts. This went unnoticed by the company for four years, and it cost them R6.8 million.