As current events in Parliament have evidenced, concerns with unauthorized spending are reaching critical levels for both private and public sector enterprises. While travel expenses are one of the most frequently altered areas for budget reimbursements, fraudulent spending habits can extend to any area where line level staff or even management is treading in a grey region of allowed spending.
Do You Know Your Expense Management System?
A major issue with this subject of fraudulent spending is that the Parliamentary audits have also helped to inform other industries about better measures that can be taken for appropriate expense management. Part of what the governmental audit also uncovered was the fact that rules and guidelines for expenses are not always as clearly delineated as they could be. While this will obviously influence employee decisions for acting with integrity, it also speaks to the actual ability for the company to engage in better expense management.
Some of the major concerns that are found with companies that are seeing budget drains include:
- Lack of agreement in upper management on how expenses should be managed
- The manner in which data on expenses is collected and evaluated
- Vague parameters for policies concerning approval with travel and expenses
What this indicates is that the internal expense management procedures can be the root of poor employee behaviors. The result is also that companies need to find effective an deficient means to both keep track of spending an provide stronger teaching points within the organization.
The size and the length of establishment for a business can greatly affect how changes in expense management will be received. This also makes it important for companies to introduce change through a series of steps that will produce both top down and bottom up changes within the practices and culture of the company.
- Stage 1 – generate an internal and centralized process for expense management within the organizational hierarchy.
- Stage 2 – define the separation of expenses and enforce approval levels to establish the corporate culture.
- Stage 3 – reinforce protocols through remote monitoring means including automated expense management and real time analytics on travel and expenses.
- Stage 4 – maintain standard protocols to further reinforce expense management guidelines and best practices.
- Stage 5 – the full use of software and automation to both streamline expense management and sustain the culture of integrity for the company.
While change can take time, especially with companies that are in the process of overcoming issues with inappropriate spending, the internal regulations and the extension of monitoring to outsourced or travel based employees will improve returns, but will also avoid unnecessary losses through either direct fraud or the fall-out of becoming accountable for employee fraud. By introducing better expense management protocols with these top down and bottom up stages, companies can combine technology and human resources for the stronger management of budgets, potential losses, and eventual growth.