7 Payroll Security Tips for Small Businesses

payroll security tips

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We say it all the time, “Getting paid on time is a big deal.” While we pride ourselves on timely and accurate payroll processing, your payroll has got to be secure too! Business owners can feel overwhelmed when the topic of payroll security comes up. It can definitely be scary, but there are simple small business tips for effective payroll security that can be implemented today.

Payroll Security Tips

The first step to not being overwhelmed by payroll security is to create a system that can be repeated until it becomes routine.

Keep that in mind as you read through these payroll security tips:

Keep the actual paychecks secure

You might already know that you should not do things like printing your employees’ entire social security numbers on their checks or leave paychecks in a giant pile sans envelopes for your employees to grab themselves (true story: we know a guy who did this). Keep any paychecks that have not been distributed yet secure! You should also think about where you keep blank checks. Are they secure? And if you have other people authorized to sign checks and they part ways with your small business, make sure that they are removed from accounts immediately.

Involve multiple people in payroll processing

At first glance, this payroll security tip may seem counterintuitive. But, if you are handling payroll in house, by having more than one person handling your payroll, you decrease the likelihood that someone would take advantage of their access to sensitive information — they know that someone else will be checking their work, so to speak. For example, having one person to handle timecards, another to prep payroll and yet another to issue payments would mean that there are three separate people to detect fraud. Plus, if you are like us and still believe that most people are good and would never purposely commit payroll fraud, you can look at it as having multiple people to detect honest mistakes. Three brains are better than one!

Tighten up computer security

You hear about data breaches on the news almost all of the time, but far too many small business owners think that it will not happen to them. Thousands of small businesses have computer systems that put their payroll security at risk. Make sure that computers are updated as needed, password protected and that payroll information is stored on a secure server.

Teach your employees about phishing

payroll security tips

Unfortunately in our electronic world, phishing scams are rampant. Phishing happens when scammers pose as a legitimate entity and send emails requesting sensitive information, which is then used to commit fraud. Let your employees know that your small business will never use email to request sensitive payroll-type information like social security numbers. And if you do ask employees for that kind of stuff over email, knock it off! They should also know that if they receive an email that they think is questionable, they can always ask someone in a management position about the email’s authenticity. That way, you will hopefully be able to quickly identify phishing emails and give the rest of your team a heads up.

And do not forget old-school, low-tech “phishing”

Long before the internet, scammers attempted to get sensitive information via the phone or mail. So it’s important to make sure you know who you are talking to on the phone. By posing as someone who may have a legitimate reason to get sensitive information about your employees (like a mortgage broker, for example), scammers can get the information they need to commit fraud. It is a good idea to create a standardized procedure for these types of external requests. For example, have specific paperwork that needs to be submitted by an employee if they want to authorize sharing their information with another entity.

Make sure physical payroll data is secure

Even for some of the most modern small businesses, paperwork accumulates — especially over time. Take measures to ensure that any sensitive paperwork is secure. This could mean using a secure room and limiting access. Locking file cabinets are never a bad idea. And as a bonus, those cabinet locks are just as good at keeping snacks secure as they are payroll information. Additionally, make sure you know which paperwork you need to keep and for how long so that you can incorporate thorough document shredding in your small business’ regular routine.

Commit to a clean breakup

Regardless of how an employee departs from your company, be sure that you get any keys, ID badges or anything else that could be used to access sensitive information. Even the sweet lady who bakes cookies for the whole office needs to give up all of those items if she leaves. You see, it is not so much that Gladys would be breaking into the office in the middle of the night to access payroll documents and commit fraud. It’s that her jerk grandson or any other number of ne’er-do-wells might do that. And if there are lots of those types of keys and badges floating around in the universe, it can make it more difficult to track down a culprit if one is used to commit a crime.

Were you thinking about creating a routine like we told you to at the beginning of the article? If so, you get a gold star. If not, it’s okay. We can help you figure it out. Either way, call us today for a free consultation/to collect your gold star. We would love to discuss specific steps your small business can take to make payroll more secure.


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