According to the Canadian Payroll Association, 54% of business leaders and business owners don’t know how to conduct or manage payroll audits. Also known as compliance audit, payroll audits are conducted to counter a number of payroll and HR related challenges encountered by organizations.
So, why should your business hire professional payroll auditing services? Here are a few benefits of these financial services.
It Verifies Your Payroll Information
When was the last time you personally verified or updated your business’s payroll information? Auditing professionals verify the pay distribution according to the rate of pay for each employee, ensuring that there are no errors in the payroll information. The auditing process also helps ensure that the pay rates match with your employees current contracts.
It Verifies Employment Statuses
In addition to verifying payroll information, auditing also verifies the employment status of employees. This can be trickier to track in larger organizations where there are hundreds of employees. Auditing professionals ensure that former employees or those on unpaid leaves aren’t receiving paychecks.
It Reviews Compliance Practices
Businesses are required to maintain accurate records of their accounting practices. However, there are often unintentional errors in the documentation of this information. Auditing professionals review these practices and identify any inefficiencies within the record-keeping process. They also identify potential error-inducing practices and review your payroll ledger accounts in detail to verify the transactions mentioned there such as that of taxes, paychecks, withholding, and insurance.