Expense fraud is the bane of the cost manager. From the employee who is a little too relaxed with the use of the company credit card to the determined fraudster who charges personal expenses to the company systematically, cost managers must constantly stay on top of the problem. Online expense reports can be one of the useful weapons in the cost manager’s arsenal.
This Is Not A Problem To Ignore
Sometimes even managers fail to appreciate what expense fraud can cost a company. Many people shrug off the implications of the occasional meal for friends charged on the company credit card. Consider that according to the Association of Certified Fraud Examiners, the median financial cost to the company of an expense fraud case is $40,000. Since you work in accounting, you know what median means, namely that half the cases cost the company more than that, sometimes into the 6-figure range. If you thought the software allowing for online expense reports was a bit pricey, you may want to reassess.
Small-Time Fraud Can Bleed You
In a recent survey of business travelers, 5% admitted to fudging their expenses. The average amount they expensed fraudulently was $2500 a year. This can seem like peanuts in the scheme of things, but that depends on how many of these people you have in your organisation, and for how many years running they get away with it. Just because only 5% admit to it, that doesn’t mean the problem is confined to 5% of your workforce. It is up to you to block the opportunity for this kind of fudging. It most assuredly adds up, even if each incident may seem minor. The devil really is in the details, when it comes to rooting out this kind of fraud.
How Can Online Expense Reports Help?
There are two key ways online expense reports can help you detect fraud. First of all an online system is simply faster and more efficient in terms of workflows. This means that the accounting staff has more time to analyze the expenses and look for fraud, because they are spending less time on tedious clerical work. They will also have better data to base their analysis on. Secondly, employees are uploading pictures of receipts and other information as they go. This leaves less room for fudging receipts and making things up. If anything looks fishy, you can spot it and question it faster. It leaves less wriggle-room for the fraudster and makes life easier for the honest employee. Online expense reports can help you catch both the small-time, occasional frauds and the big-time, systematic fraudsters.