In the highly-regulated and dynamic industry of life sciences, compliance is top of mind. But the pressure to stay in compliance, ensuring you are following the current accounting and financial regulations, is difficult for any organization who is in the race with others to innovate. And while many organizations have auditing processes in place, a recent fraud and compliance survey among life sciences industry professionals found that many are still uncertain about their current procedures.
What can you do to better manage compliance so that you can regain confidence when fraudulent behavior arises or in the event of a government audit?
1.Employee policy compliance should be made a top priority
With almost 20% of travel and expense (T&E) expenses falling outside of policy, it’s no surprise that monitoring and auditing expense reports should be made a top priority. Whether you use an internal team or external auditors, making sure your T&E expenses are within policy is an important part of ensuring employee compliance. Fraud and compliance violations can lead to more than just monetary loses in a highly regulated industry. Essentially, your organization’s reputation could be on the line.
2.Vigilance and process protect against fraud
Having an automated employee expense process in place goes a long way when it comes to fighting fraud, especially if you are diligent . Determine if your procedure can withstand fraudulent behaviors and costly mistakes by checking which actions your organization uses to manage your shield of defense:
- Require receipts for most, if not all, expenses
- Require approval of expense reports before reimbursement
- Have audit rules integrated into spend technology
- Consider pre-approvals for travel
- Use reports to help spot problems
If you checked all of the items above, then you’re on your way to fighting fraud with the right approach. Survey respondents found a combination of technology, policy, and managerial approvals is the most successful way to manage employee expenses and compliance.
3. Compliance extends beyond your company expense policy
It’s always important for employees to follow the rules and comply with your organization’s internal expense policies, but not adhering to industry regulations can come with bigger fines and even larger reputational losses. When asking life sciences respondents if they felt their company could be potentially at risk for global regulations and compliance, 57% answered “Yes” or “Not sure.”
Are you unsure that your organization’s solution for employee spend management has the ability to help safeguard you from violations? If so, it’s time to start acting as fines are devastating for those who aren’t compliant. For example, an organization can face Civil Monetary Penalties up to $1 million if it fails to report Open Payments in a timely manner. With all eyes on regulations, you can afford to be unsure.
4. It’s time to move away from your manual processes
Automation and cloud technology are no longer out of reach, however, 42% of respondents reported that they still spend about 76 hours or more per month auditing expense reports. That’s 76 more hours per month that could be used to focus on revenue-generating initiatives and strategic business goals.
With automation and artificial intelligence (AI) on your side as part of an integrated employee spend management solution, your organization could:
- Reduce expense report errors by up to 66%
- Shorten auditing time by as much as 90%
- Thoroughly audit 100% of expense reports
For more information on managing compliance and fraud visit our compliance and fraud solutions website.