For many businesses, finding a way to cut back on costs is one of the most important steps that they can take. And to do so, it’s possible that they may cut corners in a wide variety of different areas. But the reality of the situation is that some things can’t be ignored. For instance, reducing your efforts at travel expense management could save you time and money at first, but the risks of fraud and noncompliance are far too great to do so.
If you’re not convinced, consider some of the huge potential costs of travel expense management fraud and noncompliance and what it could do to your company.
- Recent studies found that about $1 billion is lost to fraud in travel expenses every single year, and about 27% of executives will commit it at some point. That’s a huge number, and one that can cripple a smaller business when the expenses keep adding up.
- For the third year in a row, a 2015 study found that increased regulatory oversight was the biggest financial risk for corporate executives and their businesses.
- On whole, compliance efforts end up running around $3.5 million, but non-compliance and the fees and penalties that come with it cost around $9.4 million.
- About 28% of companies in a survey don’t conduct compliance audits, and that those who do experience much lower rates of noncompliance and the expenses that go with it.
Obviously, this is something that could seriously impact a company that is growing and developing, but it’s not always easy to manage. Fraud alone is hard for many businesses to track because it requires careful monitoring of expenses. And that fraud can in turn lead to reduced compliance. As for noncompliance, regulatory policies change constantly and it’s a must to stay aware of them and apply them to your business.
The easiest solution is to invest in solid, dependable travel expense management software. These programs include various controls that automate a larger part of the expense report process and make it easier to monitor. This can help you not only stick close to compliance regulations, but also help you fight the fraud that may be hampering your company.
It can take extra effort and time to properly oversee your travel expense management efforts, but in the end it’s well worth it. It costs much less to stay compliant than it does to fall victim to fraud or end up noncompliant, so be sure to pay attention to this side of your company.