Is your business a victim to fraudulent expense claims?
Your organization processes a hoard of reimbursements on a monthly basis. You, as admins or account executives approve almost all of them, barring a few. These few expenses are usually the ones which have out-rightly violated your policies or don’t have appropriate bills attached.
But what if your employee is claiming reimbursement for fictitious expenses or inflating expenses while reporting them? That sounds ridiculous, right?
Most admins feel that their organization don't provide any room for expense frauds. If you’re one of them, I am sorry to break this to you, but that might not be true.
A survey by the Association Of Certified Fraud Examiners in 2016, indicated the business world suffered a loss of $6.3 billion in corporate fraudulent charges. The major fraud scheme involved botching up financial statements, asset misappropriation, and employee corruption.
Manual Expense Management Promotes Fraud
Often times, employees claim non-existent expenses. This can be done by either producing duplicate bills and manipulating already existing bills. As an admin or finance executive, the onus is on you to curb these challenges.
But how can you achieve it?
The answer lies in the way expense management is handled by organizations. In the barrage of monthly reimbursement claims lie hidden a few fraudulent expenses which often go unnoticed by the admins.
How do fraudulent expense claims go undetected?
A major reason can be the sudden onslaught of expense reports that an admin receives at a particular time in the month.
Admins are always burdened with multiple copies of expense claims. What's worse is, working with stringent deadlines also results in neglect. Deadlines and hundreds of reports to process often leave this lone warrior finding themselves beneath reams of paper reports.
The warrior’s single most important task?
To verify the legitimacy of reported expenses using the attached receipts.
We know that even the best of warriors fall when outnumbered (remember Leonidas). Battling expense reports is definitely a tougher job!
So I wouldn’t blame the admin if he accidentally overlooks a few fraudulent expenses every month.
How fraudulent expense claims can hamper your business?
In traditional expense management, fraudulent claims are conjured up by employees but they remain undetected by the admin. Thus, we can safely assume that in such a process, detection of fraud relies mainly on the vigilance of the admin.
With the world moving towards automation, it only makes sense for businesses to also proactively adapt to changes. These changes can drastically improve efficiencies across teams. Just as automatic doors use IR sensors, thereby, eliminating a human gatekeeper; businesses too, need to constantly stay updated with current trends.
3 ways to check expense report frauds at the source:
1. Use an Expense Management Software
Automating expense management using a software can work wonders in reducing expense frauds. An expense management software allows your employees to report expenses on-the-go and helps keep track of receipts in one place for quick audit. With the help of such a system the window for fraud reduces drastically.
The upside of using an expense management software is that the software can detect duplicates or fraudulent expenses without the need of manual supervision. If an expense management software is using Artificial Intelligence it has the capability to flag potentially fraudulent expenses and mark them for review by a human supervisor.
2. Enforce Comprehensive Expense Policies
A major reason why employee expenses vary over time and also within functions is the lack of a rigorous policy framework in place. With ambiguous and unenforceable policies employees are often motivated to conjure up frauds. The presence of an already burdened admin helps too. Employees often leverage this to their benefit by reporting fraudulent claims.
Defining clear policies around various categories of expenses will bring transparency to the organization. This would also result in a reduction in the instances of frauds. With an expense management software, such expense policies can be enforced in real-time while employees report expenses. Thus completely eliminating opportunities for fraudulent expense claims.
3. Simplify Approvals For Expense Reports
An often overlooked part of the reimbursement workflow is gathering approvals from concerned managers. Approvers dread expense reports and seldom do they review expenses with the eye of an auditor. This lack of scrutiny on the manager’s part also results in the admin ignoring these fraudulent expenses; due to a lack of miscommunication. Thus, a clumsy approval workflow facilitates the chances of a fraudulent expense claims to get reimbursed.
How can Fyle address these expense management challenges?
With Fyle, you can get insight into spending trends, flagged expense claims, and more. This allows managers ample amount of insight into claims. Thus, checking the health of your business travel expenses.
Using an expense management software, admins and employees can request a manager to review a report and approve the same, at any time. The manager can then approve these expense claims without having to interact with the stakeholders in person.
An expense management software that automates and streamlines the process
Expense management software is an expensive ordeal, there is no denying that. Sadly, even though it costs you so much, most software requires you to still do the manual work. But, what if we tell you Fyle can automate the entire process for you?
All our features at Fyle, are custom-designed to help ease your expense management woes. Fyle is built to provide seamless user experience, while also handling complex organizational policies. Our users love us because of the powerful expense management features we provide, while still retaining the intuitiveness of a native mobile app.
Want to get a sneak-peak into how Fyle works by eliminating duplicate bills and flagging expense frauds? Request a demo with us, and our customer champions will get in touch with you.