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Home » Business And Finance Articles » Tips And Techniques To Detect Fraud Or Errors In Timesheets

Tips and Techniques To Detect Fraud Or Errors In Timesheets

Corporate governance laws, state/federal labor laws, and accounting regulations are making companies and their executives even more accountable for transparent, true and timely performance and financial reporting. Regulatory and oversight bodies such as the SEC (security exchange commission), demanding and extremely cautious audit firms and nervous shareholders, now point the finger directly at the company's senior executives and hold them personally and criminally accountable for the company's accurate reporting on operations and any control weaknesses.

This article presents potential timesheet-related compliance violation scenarios. It recommends a set of fraud and error detection reports that will help internal and external auditors, project managers, and company executives detect unauthorized or illegal activity and achieve sustainable compliance for timesheet management. Here are the timesheet compliance reports you need:

Time Entry Modification Audit

* Time entries that were modified (created or deleted) by one user on behalf of another user. For every time entry show new and old amount, modification time and date, the name of the person who made the original time entry, as well as the modifier, and any notes describing the reason for the modification

* Time entries that were modified (created or deleted) by one user on behalf of another user without providing a note explaining the reason for the change

* Time entries that were modified by a project or group manager. For every time entry display both the new and old entry, as well as any notes describing the reason for the modification

* Time entries that were modified after having been approved

* Time entries whose attributes were changed such as from billable to not billable, R&D to non R&D, from funded to not-funded

* Time entries whose cost or billing rate was modified

* Unapproved time entries in a specified date interval

Timesheet Approval and Change Audit

* Timesheets that are approved by someone other than the person that was designated to approve them

* Timesheets that have been modified after having reopened a period

* Timesheets that are approved by administrative staff (instead of project or group managers)

* Timesheets that are approved long after they were submitted (e.g. a few months later or another specified date interval)

Project Time Audit

* List of projects that exceeded time budgets

* List of projects that show a sudden jump in time allocation

* Billable time entries that have not been invoiced after period closing and at the end of every quarter

Unusual Project Activity Audit

* List of users (employees or consultants) that submit timesheets with hours that far exceed

* List of users (employees or consultants) that submit timesheets with hours that far exceed the business unit's defined timesheet period size

* Amount of time or number of employees working on a project (or allocating time against a business unit) changed by more than X percent in comparison to the previous quarter

* List of employees that required adjustments for X% of their time entries

* For non-exempt employees report on those who have done more than X hours of overtime over the last N weeks

How Software Can Help

The reports above would be very hard to produce if time is being tracked using spreadsheets, multiple disconnected systems, or a time entry system that lacks auditing and error detection capabilities. A compliance enabled timesheet management solution should provide:

* Definition and enforcement of timesheet policies and rules; validations should be performed by the system at the point of entry

* Lock down of approved timesheets and closed timesheet periods

* Auditing of every time entry change, all timesheet approvals/period closing and cost or billing rate changes

* Notifications when budget thresholds have been reached

* Reports and live analysis dashboards to monitor projects/operations and to detect inappropriate, fraudulent, or inefficient activity, misallocation of time, or other potential problem areas

Summary

Weak timesheet controls and manual processes make a company vulnerable to fraud and errors related to cost and budget allocation, and force the organization to expend considerable resources in preparation for a compliance audit. Ineffective time tracking can also result in revenue leakage, longer billing cycles, higher probability of payroll and invoicing errors, duplication of effort and extended correction cycles, project execution problems, and ultimately, a potential compliance-related audit failure.

The only way a company can ensure sustainable timesheet compliance and governance is for it to have the proper controls, reporting and auditing systems in place. Company's executives and audit committee must have real-time access to error and fraud detection reports. This article provided a set of recommended timesheet error and fraud detection reports that every organization should have access to and analyze on a regular basis in order to validate that its employees and consultants follow a consistent timesheet entry and approval policy, are working on authorized projects based on approved budgets and scope, and that costs are allocated to the right projects.

Tom Jacobs writes for http://www.superbtimesheets.info where you can find out more about timesheets and other topics.

And here is another random article you might be interested in...

How to Convert Your Real Estate Notes into Quick Cash

If you're a real estate investor needing quick cash, selling your notes could offer a fast, easy solution.

It can happen to anyone. You find yourself in a situation where you need a chunk of cashâ€"instantly. Maybe you have to handle an emergency or simply want to free up funds to invest elsewhere. Whatever the case, selling mortgage notes can put money at your disposal within a matter of weeks.

Selling mortgage notes allows you to convert small monthly payments into an almost immediate lump-sum of cash. You won't have to wait to recoup the bulk of your investment. Plus, you can avoid the risk associated with owner financing. And you can spend the money however you want; it's yours and there are no strings attached.

Mortgage note buyers purchase a wide variety of privately-held mortgage notes, including promissory notes, land sale contracts, deeds of trust, contract for deeds and other debt instruments secured by virtually every type of property. They can work with you if you're receiving payments on residential, commercial and other types of property.

Some examples of the type of notes you can sell, include:

• Residential Notes â€" For houses, townhouses, condominiums, apartment buildings, and mobile homes

• Commercial Notes â€" For office, retail and industrial

• Vacant Land Notes â€" For developed land, undeveloped land and land not designated as a specific-use property (such as farm land or waste storage)

How It Works

Selling mortgage notes simply allows you to receive cash now for your future payments. You may be eligible to take advantage if you've sold your home or an investment property via owner carry-back financing or seller financing and are now receiving payments on that note. You could be cashed out in two to three weeks, receiving the funds by check or electronically.

Most note buyers prefer to buy real estate secured notes that are in the first lien position or wrap around the first lien position. If you have a second lienâ€"where there's a bank or another investor with a more senior lien against the propertyâ€"you may be able to sell the note. However, the price that you get won't be nearly as highâ€"unless the buyer has at least 30 percent of his own money as a down payment or in built-up equity.

Here's how the process of selling notes works: You need to contact several mortgage note buyers and request a quote. They will probably ask you to submit copies of the deed of trust or mortgage, the note, title policy, and closing/settlement statement. If there is no recent appraisal or title policy available, they may be ordered at the note buyer's expense.

Each of your notes will be evaluated on a case-by case-basis, with a number of aspects considered. These factors include the purchaser's equity, payment history, seasoning of the note, credit rating of the buyer, term of the note and the remaining balance due on the note.

A Variety of Ways to Sell Notes

If you're like most note sellers, you may automatically think of selling the entire note. That could be the best route if the note represents a high value and this is the best fit for your financial situation.

However, you also have the option of selling only part of the note. This could be ideal if you like the interest rate you're earning on the note, but just want to receive part of the cash now. Over the long run, a partial payment may be able to provide you with a much higher rate of return.

For example, let's say you sold a house for $120,000, the buyer gave you $20,000 as a down payment, and you have a $100,000 note at 7 percent for the next 15 years. You enjoy getting the income each month, but need $30,000 for another investment or to pay off debt. You could opt to receive that $30,000 in exchange for buying the next "x" number of payments, after which the note would go back to you for the balance of the term.

Or as another option, you could take a lump sum of money now, plus receive part of the payment each month thereafter. If you're not sure which option would be better, don't worry. A note buyer can work with you to determine the best solution for your needs.

Tips for Selling Your Notes

Most mortgage note buyers focus on making the process relatively simple, easy and fair. They offer competitive pricing, complete confidentiality and hassle-free closings. However, the note purchasing business isn't highly regulated, so be sure to locate and work with a reputable company. Here are some things you should keep in mind about purchasing notes:

• Up-front fees: There should be no up-front fees. A good note buyer isn't going to charge you just to provide quotes or check the buyer's credit.

• Closing and other costs: There should be no points, closing costs, or other garbage fees at any point in the process. Any fees are already included in the pay price to you.

• Appraisals: Note buyers normally require you to pay for the appraisal or the title policy ONLY if the property appraises for less than the sales price or there are problems with the title that prevent the purchase. However, these payments should cover just the buyer's actual costs.

• Credit checks: Be sure that the note buyer checks the credit of your property buyer up front. Unscrupulous buyers have been known to quote one price and then lowering it toward the end of the process. They often use the excuse that the "property buyer's credit was low". This is a twist on the old "bait and switch" scam, and it's completely unethical.

• Written Agreement: Ensure that the seller gives you a written purchase agreement covering the purchase price, contingencies, etc. Also, don't hesitate to ask questions about anything that is not clear. Any items that are not spelled out in black and white are part of the agreement. It's that simple.

Selling real estate notes is easy, and it can be a great way to generate a lump sum of cash for other uses.