"If it’s not broken, why fix it?" is how many organisations justify sticking with outdated payroll and HR systems. But in the modern workplace, where employee data is highly sensitive and fraud is becoming increasingly sophisticated, relying on legacy systems can quickly turn into a serious liability.
Modern fraud prevention requires modern infrastructure, and if your payroll and HR system can’t keep up with today’s demands for integration, visibility and control, it can open the door to serious vulnerabilities – which fraudsters love to exploit, says CRS General Manager Ian McAlister. “That’s why understanding the close connection between payroll and HR is crucial to building a strong defence against fraud.”
Companies often make the mistake of thinking that payroll is just a finance function, but McAlister points out that it is deeply rooted in HR.
“From managing employee records and contracts to onboarding, leave and termination, HR data feeds directly into the payroll engine, and if these systems operate in silos, the gaps between them become breeding grounds for fraud.
“For example, someone with access to payroll could increase their own salary without proper authorisation. Additionally, if leave balances aren’t up to date, they could claim paid leave they haven’t earned. Disconnected systems can also result in duplicate employee records, which someone can exploit to receive two salaries or payments to a fraudulent account.”
Beyond enabling fraud, these kinds of gaps undermine compliance efforts, increase the risk of regulatory penalties and can result in significant financial losses for the business.
Closing the gap
Global research shows that payroll fraud can persist for years before being detected, and the financial losses add up fast.
“Whether it’s through inflated overtime, ghost employees or duplicated payments, even small incidents can cost organisations thousands, if not more,” says McAlister. “The longer it goes unnoticed, the more damage it does. Bringing payroll and HR together in one integrated system helps close the gaps where fraud can slip through. With everything connected, it becomes much easier to spot red flags before they turn into real problems.”
Integration ensures that both payroll and HR teams are always working with the same, up-to-date information. This means that when employee details like salaries, leave balances and employment status are updated, the changes reflect automatically across the system, eliminating the need for manual handovers that can lead to errors or tampering.
Additionally, built-in approval steps mean every change is checked and signed off, while real-time exception reporting can quickly flag issues like duplicate bank accounts or unusual adjustments, ensuring problems are spotted before they become serious.
Protecting your bottom line
According to McAlister, investing in secure, integrated systems is a crucial step in protecting your bottom line – not just from fraud, but also in terms of operational efficiency and compliance.
“An integrated platform creates clear, transparent audit trails between departments and role-based access, making it easy to track who did what and when, which makes it tougher for any fraud to go unnoticed. When systems are connected and workflows are automated, there’s less room for manual errors or manipulation, and more accountability at every step of the process. This kind of visibility not only safeguards against fraud, but gives leadership confidence in their data and decisions.”
Fraud prevention is all about structure, he concludes. “When payroll and HR work in sync, backed by the right system, there’s nowhere for fraud to hide. By uniting payroll and HR under a single, automated and transparent system, organisations can dramatically reduce risk and build a stronger foundation for compliance and trust.”
For more information, go to: https://www.crs.co.za/.
Share
CRS
Four decades of innovation
CRS is a pioneering force in the South African payroll and HR industry. Since our establishment in 1985, we have earned global recognition as the go-to human capital management expert for organisations seeking innovative solutions to optimise their workforce.
Our approach is all about maximising value for both employers and employees. We do this by crafting bespoke solutions that turn payroll and HR departments into strategic powerhouses, creating workplaces of inspired, engaged and valued employees.
Our expanding footprint extends to more than 35 countries in Africa, Asia, the Middle East and Europe.
For more info, go to www.crs.co.za