The most obvious reason for implementing effective expense management is to prevent expense fraud. However, business fraud goes beyond just expense fraud, yet 30% of the time, simple expense fraud is tied to other kinds of fraud as well. This means that effective expense management can also contribute to preventing business fraud more generally.
Fraud Is Not Just Expensive Lunches
It is estimated that fraud costs business an average of 5% of revenue. Around 15% of fraud cases are expense fraud cases, ranging from petty to six-figure offenses. But the employee who fudges expense reports is also far more likely than the average employee to be involved in some other form of fraud. Therefore, if you can catch the employee quickly it can save your company money far beyond a few expensive lunches, and it can weed out the employee before large-scale damage is done.
Speed Is Of The Essence
The average time it takes companies to detect fraud is 24 months. That is much too long. The more swiftly you can detect and root out the problem, the better it is. A fraudster who remains undetected for a long period of time is likely to get bolder and possibly branch off into other kinds of fraud, costing the company more and more money. The other problem is that when detection is not swift, it impugns the credibility of company policy, which can be disastrous for morale. You want to detect the problem before the fraudster’s colleagues realise that something isn’t right.
Get On Top Of The Problem
Integrated expense management solutions can go a long way towards improving the speed and efficiency of fraud detection. With the kinds of software available at this point, software that integrates all the necessary information into coherent reports and projections, there is no excuse to have antiquated expense management procedures that leave you open to fraud.