Although companies stay focused on the bottom line, this approach can overlook potential dangers in fiscal losses that are actually directly manageable. In general, businesses can expect as much as 5% of their revenue to be lost to some form of employee fraud. This can happen overtly through payroll embezzlement schemes, but it is more common of an occurrence in reimbursements for employee expenditures.
Preventing this kind of loss can be integral for several reasons:
- Preserving company reputation
- Avoiding losses for taxation on monies that were reimbursed incorrectly
- Retaining actual returns on investments
- Exposing employee theft and sabotage
This also means that an expense reporting system that allows for greater control over access and approval can be the first step to generating positive change.
Addressing The Threat Of Fraud
The first thing that companies need to do to avoid fraud is to actually be aware that it is happening. Automated expense reporting systems can be one way of providing a means to monitor spending and how the approvals for management are being used. This can also generate a set of guidelines that provide better clarity for employees who may be unaware that they are engaged in illegal or unethical action. By setting protocols through the expense reporting systems, it also provides a stronger standard for compliance to actual organizational regulations.
Expense reporting systems also provide managers and owners with a more concrete and concise manner with which to review data. This may include a better means to review spending and budgets overall, but this can also include specific data about employee spending trends and areas in the company where significant losses are apparent. Expense reporting systems that can filter data and generate specific spreadsheets will also contribute to this ability to monitor and immediately address the issue of fraud within a company.