Welcome back! In the first part of our blog series, we discussed:
- The heightened reality fraudulent risks during times of economic downturns.
- Why spend control has never mattered more.
- The importance of an adaptable compliance program.
In part two of our series, we dive into how businesses should bring employee spend into focus to help protect against fraud. Since white-collar crimes can be sneaky – often using multiple means to steal and pull off their attacks – detecting fraud can be notably difficult.
But there are ways to help deter fraudulent schemes. The Association of Certified Fraud Examiners (ACFE), for example, reports in its Global 2020 Study on Occupational Fraud that companies with internal policy controls are associated with lower losses to fraud and quicker detection. With that in mind, here are some areas to consider and questions to ask when you re-visit your company’s T&E policy:
1. Take policy into consideration:
- How often do you update your travel and expense policy?
- Does it include what is and isn’t an acceptable expense?
- Does it include how out-of-policy spend or non-compliant expenses are handled?
- Do you typically have employees working from home on a regular basis?
- What’s your company’s risk appetite for detecting fraud within employee expenses, travel booked, or invoices?
- Are you capturing all of the data needed to assess your compliance and fraud risk?
2. Establish the right process to prevent and detect fraud:
- Does your credit card data auto-populate into expense reports?
- Do you require e-receipts beyond a certain spend limit or threshold?
- Do you have audit rules set up to automatically verify the appropriate checks and balances?
- Do you have approval flowcharts to make accountability a group effort?
- Do you have standardized reason codes to identify why an expense might not be submitted?
- Do you have an external audit program that’s unbiased to help oversee and control spend?
3. Use reporting to monitor and analyze your data
- Identify what teams are responsible: Is it finance, travel, HR, legal, audit, compliance, risk?
- Use data to identify trends: Car mileage versus car rentals, excessive spend in specific expense types, airport parking versus Lyft, Uber, or taxi drop-off
- Do periodic reviews and checks of: Duplicate company meals, expense items, hotel stays, meal attendees, expenses near receipt limits, submitted ticket charges with unsubmitted refunds, merchant validation
4. Compare control and compliance benchmarks with SAP Concur solutions
- Receipt attachment
- Frequent use of high-risk expense types
- Higher percentage of cash expenses
- Travel expenses on cash
- Mileage transactions on card
- Excessive personal mileage
- Route data attachment
- Reports approved receipts not viewed
How Are Other Businesses Handling Fraud?
During a recent SAP Concur webinar, participants answered the following questions on how they felt they were handling fraud at their own organization. Here are the results (click to zoom):