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How to do a Payroll Security Audit

Posted On: 06/24/2024 / Payroll Services
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It's Important To Audit Payroll Against Potential Security Breaches

Payroll security is vital to the functioning of any business. It doesn’t matter how many people you employ – if you can’t get paychecks out on time, your business won’t thrive. Even worse, failure to secure your data can put both the vital information of your employees and your business in danger. If you want to make sure that your payroll is being successfully defended, doing a payroll security audit is a must.

Undertaking a payroll security audit

The hardest part about starting your security audit is just that – starting. You may not know exactly what to do or where to go first, but a little guidance will get you where you need to be. You must go into the audit with an understanding of how to keep your payroll secure, as well as how other businesses ensure that their own payroll security systems stay up-to-date. From there, you’ll get to start an audit that will help your company to continue to grow and to avoid major issues with payroll.

payroll security audit

Understand your purpose

Before you begin your security audit, you have to know why you’re doing an audit in the first place. Are you worried about issues of efficiency or of security? Are you going in with the intent of making changes to the hardware, or are you more concerned about the employees? Craft a list of the roles and practices that should be housed under the payroll security umbrella, and use them as metrics going forward.

Audit your payroll

Conducting a standard payroll audit is a good way to get started with your overall security audit. This time-intensive process can pay off huge dividends, especially if you find problems. This is a good chance for you to notice issues before they result in fines or other legal troubles, so go through your records with as much attention to detail as possible. Make sure that all of the numbers add up and that you keep a running tally of any problems. This should help you to differentiate between outliers and more serious issues that might need to be addressed later in your audit.

payroll security audit

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It may be a good idea to bring on an outside consultant during this phase to make sure that the audit is undertaken objectively. Some of the most common payroll issues have to do with internal problems, so having an outsider comb through your payroll will help to ensure that your data is as accurate as possible. Once you have access to the data, you can start talking to the people who use it on a regular basis. You might be surprised by the difference between what an outsider picks up and what your employees experience.

payroll security audit

Talk to your staff

Your payroll staff needs to play a major role in your payroll audit. As they are the individuals with the most daily access to your payroll systems, they’ll be able to tell you about any systemic issues. Depending on the size of your business, you may need to interview everyone who has payroll responsibilities – different parts of the department may be privy to information that wouldn’t cross the minds of others. If you can gather all of that data, you should be able to get a clear picture of what your employees experience and how your payroll systems actually work.

payroll security audit

This is also a good time to get feedback on your systems. If something isn’t working correctly, there’s a good chance that your employees are either ignoring that function or finding a way to work around the problem. This can lead to security breaches, so knowing what needs to be fixed is absolutely vital. Encourage your employees to come up with a list of things that they would fix about your payroll system and try to determine if those additions will help you to better enact the best security practices for your business.

payroll security audit

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It’s also important to remember that your company’s IT infrastructure plays a role in how your payroll is processed. As such, it’s time to go through a miniature IT audit as well – looking specifically at those issues that might impact your payroll. This is almost certainly something that your IT staff will be equipped to do, so let them examine the internal systems and make recommendations as to how they could be improved. Again, you’ll need to measure the response of your team against your list of best practices in order to make sure that everything is in order.

In addition to the technical side of things, you’ll want to look at how your employees interact with the payroll system. Are they practicing good data security measures? Is it possible that some employees are letting too much information out into the open? Does everyone in your place of business understand the dangers of things like phishing and other forms of social engineering? You’ll need to be able to answer all of those questions before you finish this part of the audit. Even an incredibly secure system can still be prone to problems if your employees aren’t taking security seriously.

Synthesize the data

Your final step should be to synthesize the data that you’ve collected so far. What kind of picture does this paint of your payroll security? What does it say about your company’s employees, procedures, and systems? Does it show that you’re following the best possible security practices, or does it show that you need to shape up in key areas? The data that you gather should be compared against your purpose for doing the audit in order to make a plan.

Note that this kind of audit is only useful if you can gather actionable data. If your company is not in a position to do something with all of the information you’ve gathered, it’s less than useless – it is a waste. Take the process of synthesis seriously so that you can make direct suggestions about what needs to be changed and what can stay the same. Without clear guidelines, you will have done little more than waste your company’s time and its resources.

Your audit is important, so make sure you pay careful attention to each step along the way. Know what you need, how your payroll works, and the problems that might happen in a system that’s quite prone to human error. If you’re ready to get your payroll under control, you don’t have to do it alone – contact Paytech for your free payroll security audit today.