It’s safe to say the events of the past seven months have altered some human behaviors and corporate norms. A significant portion of the workforce is still laboring remotely. Meetings, now regularly interrupted by pets, children or technical glitches, have become less formal. The lines between business and personal life have been blurred.
While some organizations are finding this new way of doing business more effective or positive than they expected, this environment nevertheless opens companies up to a new threat: expense fraud.
Prior to COVID-19, about 7% of all expense claims could be classified as fraudulent. False claims range from the unintentional, such as a manager unknowingly approving an out-of-policy expense, to the flagrant-but-difficult-to-spot, such as an employee repeatedly expensing a travel per diem at times when they weren’t actually on the road.
We know that when financial crises hit, fraud goes up. Financial pressures on companies and individuals lead to increased impulses to behave dishonestly.
This particular crisis, however, creates additional dimensions for fraud potential: A rapid reduction in internal resources, new organizational structures, regularly shifting responsibilities between employees and departments, diminished boundaries of propriety, and acute IT demands — you might say it’s the perfect place for both unintentional and opportunistic fraud to take root.
Companies that have previously relied on manual audit processes to catch false claims may find themselves underwater and out of their depth to catch the kind of fraud that could already be underway within their organization.
The best way to stay on top of spend control and fraud risk in this current environment is to minimize the manual processes required to spot discrepancies. By adopting an end-to-end business expense management system that integrates with your ERP, you can enact policy at the point of purchase, automatically spot duplicate or suspicious claims, and stay on top of your company’s spending in real-time.
Don’t let fraudulent expense reporting cost your company.