Travel and expense fraud, a business challenge

Ensuring compliance with travel and expense regulations is a challenge for companies. As economic uncertainty persists and ways of working evolve, companies face new risks. Failure to comply with corporate policies has consequences: according to the Association of Certified Fraud Examiners (ACFE), an estimated 5% of company revenue is lost each year due to fraud in general.

1. Keep policies up to date
Ways of working are evolving, and managers must ensure that company policies evolve at the same time. It is therefore important to keep them up to date to avoid non-compliance. An example is when agreeing on what constitutes an acceptable expense when telecommuting.

2. Provide regular training

The Association of Certified Fraud Examiners has found that fraud awareness training reduces both the cost and duration of fraudulent activity by helping employees understand the company's expectations.

3. Use smart technologies

AI is an invaluable tool for detecting fraud. By working with large databases, it can identify patterns and irregularities arising from cash transactions and other methods that could circumvent policy compliance.

One example is in expense submission, which can be automated through technology, with automatic uploading of receipts from vendors into the travel and transportation system, such as Uber.

These types of innovations encourage compliance with expense and reporting regulations, and employees are favorable and amenable to change, according to data from SAP Concur's latest report, which shows that two-thirds of managers would like to see AI built into Travel and Expense tools.

4. Simplify tasks

New automations allow auditors to spend their time on higher-value strategic tasks, such as reviewing suspicious spend patterns identified by AI, and help reduce noncompliance.

5. Make information accessible

Employees should receive all information clearly about travel and expense policies. It is up to companies to ensure that all details of the policy are well documented and sufficiently accessible for employees to refer to, thereby understanding the limits of what they can and cannot spend.

Fighting fraud and ensuring compliance is an ongoing task. Reducing that 5% revenue loss is necessary for many organizations to protect their bottom line. As such, it is up to teams to work together to prevent unauthorized spending, put systems in place to detect fraud and ensure that those systems remain in place as policies evolve.