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Tech can beat payroll fraud

Outdated payroll processes that rely on Excel spreadsheets and manual accounting are easy to manipulate and defraud, but BRUCE VAN WYK, director, PaySpace, believes the use of modern technology will reduce much of the fraud.

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The Association of Certified Fraud Examiners (ACFE) lists payroll fraud as one of the costliest examples of asset misappropriation affecting businesses around the world. This is partly due to the fact that payroll fraud tends to go undetected for longer – as time passes, the scheme grows, and your business suffers exponentially. Sometimes, payroll fraud can be traced back to human error but more often than not, it’s an opportunistic criminal act. Either way, outdated payroll processes that are unable to proactively detect fraud put your business at risk.

Africa is a vast continent, full of opportunities but not without its challenges. Many government departments, as well as private businesses, have fallen victim to unethical payroll administrators falsifying employee benefits, paying ‘ghost’ employees and miscalculating expenses. In South Africa, for example, a 2016 PwC survey reveals that 28% of local companies have suffered as a result of fraudulent HR and payroll activities. 

Moving up the continent, the governments of Liberia, Kenya and Nigeria have all reported incidents of payroll fraud. These include administrators paying themselves salaries long after retirement, paying salaries to people who no longer work for the government, and paying salaries to non-existing or ‘ghost’ employees.

In April 2017, Ghana’s finance ministry conducted an audit of civil servants, identified non-existing ‘ghost’ employees and removed close to 27,000 names from the payroll. A national census removed just over 23,000 names, reducing the enormous wage bill substantially and saving the country over US$50mn in 2017 alone. On the back of this, the Ghanaian government is now looking into outsourcing its payroll to ensure a more efficient management system that improves visibility and speed, while also ensuring compliance and accountability. 

Outdated payroll processes that rely on Excel spreadsheets and manual accounting are easy to manipulate and defraud. However, the following three technologies can provide your business in Africa with better payroll protection, keeping your operations fully compliant and safe. 

  • The cloud

Cloud-based, mobile payroll software gives payroll managers, administrators and employees easy access to relevant payroll information on any device, anywhere and at any time. The information is fully transparent, and access is clearly tracked and recorded. If certain information is particularly sensitive like medical and financial data, then different access controls can be assigned to different employees. 

Management can use real-time cloud analytics to filter data-points according to relevant fields, generate daily activity reports with little effort and thus, spot any payroll fraud fast. When people know measures are in place to identify and catch a criminal, they are less likely to commit a crime. Transparent company data that makes use of the cloud is crucial. 

  • Automation

To reduce the risk of payroll fraud, you need to reduce the need for human oversight and intervention. Modern payroll technology eliminates the need for manual intervention, automating these five important functions:

    • Leave management – an employee self-service authorisation process automatically inputs leave dates into the payroll system. If an employee applies for more leave than they are entitled to, the system will send a notification. 
    • Commission allocations – a built-in company specific commission calculator ensures that employee commissions are worked out and paid correctly.  
    • Data integration – seamless integration with accounting software, further reducing the amount of human errors. 
    • Earnings and deductions – automatically process recurring employee earnings and deductions.  
    • Bank account and ID number verification – confirm new employees’ details quickly.  
  • Workflow authorisation

A modern payroll system helps you combat fraud by sharing authorisation responsibility across departments. If, for example, HR adds a new employee’s ‘master’ information like name, surname, ID number and address, it then directs the task to payroll to load the employee’s earnings and deductions. With this additional oversight and multiple authorisations, it’s much harder to create ‘ghost’ employees. 

Unfortunately, there will always be dishonest people looking for an easy way to make more money – and some of them may end up working for you. Don’t give them the opportunity to commit occupational fraud under your roof. Put modern automated payroll technology to the test and protect your African business’ from costly fraud. 

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Netflix lifts lid on first Nigerian Original

The streaming giant is set to increase its investment in Nigerian and African entertainment

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Back row (From L-R): Banky W, Ted Sarandos (Netflix Chief Content Officer), Kate Henshaw, Richard Mofe-Damijo, Felipe Tewes (Netflix Italian & African Originals Director), Omoni Oboli, Ben Amadasun (Netflix Africa Licensing Director) and Akin Omotoso Front Row (L-R) Mo Abudu, Adesua Etomi, Dorothy Ghettuba (Netflix African Originals lead) , Kunle Afolayan, Kemi Adetiba and Ramsey Noah.

The working title is the “Akin Omotoso Project”, but the world will soon get to know it by a snappier title. It is the first African original scripted series from Nigeria commissioned by Netflix. To be directed by Akin Omotoso, with Daniel Oriahi and CJ Obasi, it is planned to be a six-part series.

Netflix this week announced that it will increase its investment in Nigeria’s creative community, starting with the Akin Omotoso Project,

The series will star Kate Henshaw and Ade Laoye in leading roles, alongside other Nollywood greats and fresh faces, such as Richard Mofe Damijo, Joke Silva, Fabian Adeoye Lojede, Kehinde Bankole, Ayoola Ayolola, Toyin Oshinaike, Goodness Emmanuel, Ireti Doyle, Fabian Adeoye Lojede, Bimbo Akintola, Tope Tedela and Ijeoma Grace Agu.

Set in modern-day Nigeria and shot in Lagos, this drama tells the story of Kemi, a goddess reincarnated as a human to avenge her sister’s death. But first, she must learn how to use and harness her superpowers to defeat her enemies and save her family from destruction. The series will be produced by Rififi Pictures.

Over the last year, Netflix has started to invest in the creative community – bringing Nigerian stories to audiences all around the world. These include: popular movies such as Merry Men, The Real Yoruba Demons, The Wedding Party 2, King of Boys; Nollywood classics like The CEO, October 1 and The Figurine; and films by renowned Nigerian director, Kunle Afolayan, such as Mokalik. These much loved Nigerian movies will join Nollywood favorites such as Chief Daddy, Lion Heart and box office hit, The Bling Lagosians.   

Ted Sarandos, Netflix’s Chief Content Officer said: “Movies like King of Boys, Merry Men and The Bling Lagosian have shown how much our members love Nigerian movies. So we’re incredibly excited to be investing in Made in Nigeria stories – bringing them to audiences all around the world”. 

Dorothy Ghettuba, who leads African Originals at Netflix, said: “I’m excited that in the same week that we’re launching Queen Sono, we had the opportunity to be here in Lagos with Nigerian storytellers to share plans of our first Nigerian original production. Our continent has a wealth of diversity, multiplicity and beauty in stories that have yet to be told and we want to be top of mind for creators in Nigeria, especially when it comes to stories they haven’t had a chance to tell yet.” 

Last month, Netflix enabled Nigerian members to pay for its service in Naira – making it easier for subscribers to use Netflix. Members can enjoy a wide range of diverse, quality entertainment, including African Originals like Queen Sono, which launches this Friday, 28 February. Other African Originals launching this year include Blood & Water and Mama K’s Team 4. 

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Load-shedding generator could blow your insurance

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Load shedding is going to remain a reality in South Africa for at least the next 18 months as Eskom conducts maintenance on its ageing power plants – but don’t go rushing off to buy your own alternative power supply without first checking how it’ll affect your home insurance.

That’s the warning from King Price’s partner of client experience, Wynand van Vuuren, who says it’s vital that alternative power supplies like generators are installed and certified by accredited electricians. If these devices are installed or used incorrectly, you might not be covered for any damages that may result.

“There’s been a huge upsurge in the number of people using portable generators to keep a few basic essentials going when the power goes off,” says Van Vuuren. “But what most people don’t know is that you’ve got to have them installed professionally by an electrician. You can’t just stick your generator in the garage with an extension cord running through the window.”

Here are Van Vuuren’s top tips for staying covered and charged safely during load shedding.

Do your homework

Know what your alternative power options are, and the pros and cons of each.

An inverter changes DC power from a battery into AC power that you can use to operate all kinds of devices. Obviously, it needs a battery pack to be useful. These batteries are either charged by solar or from the grid while the power is on.

A portable generator is a little generator on wheels that you see people buying in their dozens at Makro and Builders Warehouse over the weekend. They’re relatively cheap and easy to operate, but can’t keep big appliances running.

Stationary generators are usually slightly bigger units that are installed permanently, and switch on automatically when the power goes off. They’re more expensive, but have greater capacity.

Stay safe – and covered

Apart from keeping your lights on, the different power options all have one thing in common: they must comply with safety guidelines, and be installed by a professional.

“I know of guys who take their portable generators to a different mate’s house every weekend so they can watch the rugby during load shedding,” says Van Vuuren. “It’s not as smart an idea as you think: not only is the generator not covered, but any possible damage caused by the generator won’t be covered either, because it’s not properly installed.”

It’s also essential that portable generators are operated in open areas with good air flow, to prevent carbon monoxide build-up, and that fuel is stored safely in an area with adequate ventilation.

Keep your bases covered

If you’re using a generator or an inverter, make sure they power your electric fence, gate and alarm as well, as burglars are all too quick to exploit opportunities caused by power outages. If you don’t have an alternative power supply, make sure your fence, gate and alarm have a battery back-up that’s sufficient to see you through your darkest moments.

Oh, and make sure your generator’s insured as well, in case it’s stolen or struck by lightning. You would typically insure a portable generator under your home. A stationary (standby) generator becomes a fixed fitting once installed and must, therefore, be added to your buildings cover.

Beat the downs with UPS

Another major headache for South Africans is the power surge that can happen when the power is switched back on after load shedding, with big-ticket appliances like dishwashers, televisions, fridges, coffee machines and sound systems all at risk.

“We’ve seen claims for ‘fried’ computer equipment, appliances and even distribution boards caused by power surges,” says Van Vuuren. “This can be avoided by installing a UPS (uninterrupted power supply) – which doesn’t come cheap – but is advisable to at least protect costly items, like TVs and sound systems, and items with intrinsic value, like laptops.

“The other alternative is to manually disconnect your more sensitive appliances from the power supply and reconnect them after the electricity is switched back on.”

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