How automated technology can prevent a payroll fraud
FYI, this story is more than a year old
In light of the massive scandal surrounding Plutus Payroll's alleged $165 million fraud, Don Sharp, executive chairman, Integrated Payment Technologies (InPayTech), gives his perspective on how certain technology could’ve prevented the fraud.
InPayTech says the issue could’ve been avoided if automated technology was used to make taxation payments directly to the Australian Taxation Office (ATO) rather than relying on a third-party payroll company, Plutus, to make payments on their behalf, which opened the opportunity for fraud.
“Removing the need for a third-party involvement to handle the payroll is the most logical and immediately available solution to restore trust to employers and the ATO that the payroll and PAYG system is operating with zero opportunity for fraud,” says Sharp.
“Employers caught up in the Plutus Payroll fraud could still be liable for tax that was stolen by the payroll company as they remain responsible for those tax payments which never made it,” Sharp adds.
InPayTech emphasises their payment technology, PayVu, as an example of this automated technology.
Sharp says PayVu eliminates the need for employers to outsource payroll services and it therefore removes the opportunity for illegal behaviour.
Expected to launch on July 1 this year, PayVu acts as an overlay service that will sit over the top of the New Payments Platform (NPP), says InPayTech.
“PayVu goes a significant way to reducing the opportunity for payroll fraud. It sits within the existing banking system and can be used by employers to fully automate payroll payments to employees and taxation payments to the ATO,” comments Sharp.
He continues, “importantly, PayVu speeds up payments and it removes the need for third parties such as payroll companies and clearing houses to make payments on their behalf, without detracting from employers’ access and control of payments.”
He says that the key to avoiding a fraud is to fully automate payments at the employer level, which takes the opportunity away from third parties to pocket monies intended for the ATO and other parties.
Sharp concludes, “there are no opportunities for payroll backlogs, delays or fraud.”