In South Africa, payroll fraud has become a multi-billion Rand issue, impacting both the public and private sectors. With estimates suggesting that businesses lose millions annually to fraudulent schemes, the National Treasury is now prioritizing digital payroll systems for state entities.
However, moving from paper to digital is only half the battle. According to Yolande Schoültz, founder of YSchoültz Attorneys, and Sandra Crous, Managing Director of Deel Local Payroll, a digital platform is a tool, not a silver bullet. If your internal policies are weak, your software cannot protect you.
The most common factor in payroll fraud is a lack of oversight. Often, a single payroll administrator holds all the keys to the kingdom, operating with little to no supervision. This chain of custody failure allows for the creation of ghost employees, the diversion of funds to unapproved bank accounts, or the collusion with former staff members.
How do you know if your payroll process is vulnerable? Look for these warning signs:
- Payroll software is isolated to a single device or a device that only one person can access.
- Frequent changes to employee banking or personal details occur immediately before or after a payroll run.
- An administrator who works excessive, unexplained overtime or logs in at strange hours to avoid scrutiny.
- Staff are manually feeding calculations into other systems rather than using automated integrations.
Modern, cloud-native payroll platforms, like Deel Local Payroll, powered by PaySpace, are designed to eliminate these blind spots. They support financial diligence through:
- Multi-User Access: Allowing HR, Finance, and Audit heads to view dashboards, meaning no single person controls the entire process.
- Automated Integration: Connecting payroll directly to other systems of record to prevent manual data interference.
- Audit Trails: Generating granular, real-time reports that flag any changes to banking details or reporting information.
- Employee Self-Service (ESS): Giving employees direct access to their own payslips, which acts as a crowdsourced check; if an employee sees an irregularity, they will report it immediately.
As Sandra Crous notes, “A nutrition app won’t automatically get you to eat less, and a fitness app won’t suddenly get you to exercise more.” You must use your payroll tools to reinforce your policies.
If you want to catch fraud, stop looking for big changes. Most fraudsters siphon small amounts over a long period. By using regular reports and integrating your data, you make it significantly harder for criminals to hide in the cracks of your organization.
