In a sense, any business venture, regardless of size, is an act of faith. Your investors trust you to guide the business responsibly, and be transparent with them about company performance. You trust the employees you hire to execute their duties in a responsible manner, and your employees trust you to look out for their professional interests, and reward their work with a salary, and exceptional work with raises, promotions or other performance bonuses.

All of these acts are taken with the hope the by one party fulfilling their end of “the deal” the other party will too. And this is why, as surprising as it may seem, expense reports can be a quiet, but important cornerstone of your company’s ethical practices.

The Little Things Count

Statistically, most irregularities or incomplete data on a company’s financial activities are most likely to occur in the area of travel expenses. There are a lot of reasons for this. The nature of a working trip’s hectic schedule can often make it difficult to account for every single expense, especially if an employee is initially paying for things out of his or her own pocket and getting reimbursed later.

Unfortunately, this same problem with lack of oversight and accountability can result in more than just inattentive expense reporting. Fraud, through the deliberate misreporting of expenses is one of the most common forms of financial abuse and theft in most businesses. Some employees may inflate expenses slightly to make a little bit of extra money during the reimbursement process. Others take huge liberties with significant personal purchases attributed to an expense report.

When this happens, it does one of two things for a company; it convinces the employees that succeed that they are more clever than management for exploiting the system and getting away with it. Or, it shows them that the company simply doesn’t care enough to correct the problem. In either case, the final result is the same; it encourages staff to continue engaging in this behavior. And once the problem is a regular occurrence with expense reports, it can easily spread to other practices within the company.

Stop The Problem Before It Begins

By taking the time to implement and diligently use expense report software, a company creates a deterrence mechanism that prevents this kind of opportunistic thinking from ever occurring. Expense report software can track and display company credit card purchases to a finance department. With regulations in place to use modern software to photograph receipts, accurate tracking of purchases is made easier. By collating the expense history of all employees and being able to track and compare them, you can find clear patterns in specific individuals with higher expenditures than comparable peers, and conduct investigations.

Through the intelligent application of good expense report practice, the use of effective software solutions, and the introduction of clear regulations and compliance, you can ensure that ethical reporting of travel expenses carries over to other aspects of your business.