How to Cultivate Compliance and Prevent Expense Fraud
How much is it to travel from your main headquarters to your satellite office in another state? When you go around and ask your colleagues, odds are, they would have different answers.
This simple experiment shows just how easy and common it is for employees to make honest mistakes on their expense reports. The question is, however, are these really mistakes or deliberate misrepresentations?
According to a 2017 Spend Analysis Report on Oversight Systems, organizations typically lose 5% of their annual revenues to fraud. 89% of these losses are due to asset misappropriation that commonly occurs during expense reimbursements. Over the years, whether through lenient policies or loopholes in the systems, your employees may develop their own schemes to milk your company of what could be your revenue.
A Culture of Compliance
Half of revenue losses due to fraud are due to weak internal controls, meaning the systems in place make it easy for your employees to commit fraud or steal from your company.
So how do you prevent expense fraud and cultivate compliance throughout your organization?
First, you have to review your existing policies for travel and expenses. Once you’ve done this, you can analyze which ones need to be removed, modified, or reconsidered. As you update your system, you may also consider tools that make it easier for your people to be compliant.
It’s also important to create a system through which you can pinpoint where anomalies happen, so you can catch anomalies before they occur or track and remedy your workflow.
Regular audits are also essential to ensure adequate adherence to policies, so that you can spot any weaknesses in your flow and address them.
Lastly, you must find a way to monitor and track expenses automatically to make things easier and less prone to padding and fraud.
Gorilla Expense Helps Put a Stop to Fraud
Manual and legacy systems may be around for a long time, but they may not be appropriate for today’s time, so as a result, your systems are a wreck. It’s hard to establish transparency through all the stages of your expense reporting and reimbursements.
Investing in expense management software such as Gorilla Expense can show you a crystal clear picture of spend so that you can reign in on fraud.
With Gorilla Expense, you can connect spending data directly from suppliers and virtually all different sources. This way, no matter when or where your employees go, you can keep track of their spend.
You may also equip your managers the right arsenal of tools to fight fraud, such as alerts when spending exceeds budget thresholds.