According to a KPMG survey, the most common perpetrators of fraud are “business insiders”, with 36 per cent of fraud attributable to business management*. Organisations in Australia need to safeguard against the threat of these inside jobs with proper controls to catch fraud before it happens.
Employees are spending more money across different spend categories and using more payment methods than ever before. This leaves organisations vulnerable to fraud and compliance risks unless they implement a solution that keeps pace with the new ways employees spend.
Many organisations think their policies and processes are good enough because they either haven’t had a major issue to rectify, or trust their employees to be honest about their spending. However, there are many things to consider including visibility, security, and compliance. Businesses need the right tools, policies, and procedures in place to bring risks under control.
There are three ways organisations can prevent fraud and enforce policy compliance:
1. Update policies
When spending is less structured and centralised, businesses experience gaps in spend data and lose oversight. This is why policies need to be current, have realistic boundaries, and be clearly understood by all employees. It’s also important to adjust policies to meet spending patterns or needs that may have changed. For example, an increased reliance on mobile devices may result in higher phone bills. Employees should be informed about appropriate expenditures, and procedures if a policy is violated.
2. Plug any leaks
Organisations should take some time to review receipts to see if expense reports are matching up. The best way to get a tighter control on expense management is to introduce a corporate card. This lets businesses monitor employee spending behaviours, eliminate costly mistakes, audit expenses efficiently, and improve compliance.
3. Automate routine tasks
Comprehensive, easy-to-understand policy is as important as technology. Manual data entry can account for many issues, including typos, counting receipts twice, or calculation mistakes, which can be mistaken for fraud. An automated solution that integrates travel, expense, and invoice data creates a centralised information source that brings risks under control. It also gives finance leaders greater visibility into spend.
Adopting a zero-tolerance policy and shining a light on fraudulent behaviour are the most effective ways organisations can deter further fraud. Organisations should ensure their processes follow industry best-practices, resulting in time and money savings, and an overall improved experience for employees.
Matt Goss, managing director ANZ, SAP Concur