Ethical commitment

By: Pascalle Albrecht

Combat travel and entertainment expense fraud through corporate card solutions

Travel and entertainment spend can be a hotbed for fraud in corporates.

The Report to the Nations on Occupational Fraud and Abuse noted that 14.5% of the more than 2 400 cases of occupational fraud it surveyed were uncovered in the travel and entertainment (T&E) domain.

Similarly, Concur, an integrated T&E management solutions provider, notes that T&E fraud is easy to commit, owing to the number of transactions that take place, the unconsolidated nature of T&E data sources and the fact that it can take as long as 18months to detect any fraudulent activities.

Several forms of T&E expense fraud can be identified. The following are a few examples:

  • Reimbursement for a personal expense by claiming that it is business-related

  • The same expense reported multiple times

  • Submitting receipts that have been altered to portray an inflated amount

  • Submitting false receipts

In many cases, unscrupulous employees 'cut their teeth' on T&E fraud before progressing to other forms of larger corporate fraud. If the environment in which these fraudsters work supports and enables their unethical behaviour, allowing them to succeed unchecked, it is more than likely that they will move on to bigger things...

But it doesn't stop there, says the Association of Certified Fraud Examiners. They have stated that there is a risk that personnel privy to the unimpeded, unethical behaviour of their co-workers may follow suit - "I know others are fudging their travel expenses, why shouldn't I?"

Corporates' total losses owed to deliberate fraud are significant (not considering the additional losses caused by simple errors or an inability to consolidate all the various sources of T&E spend).

Introducing a corporate card solution can assist corporates regain control of their T&E spend by identifying indicators of fraud and encouraging ethical behaviour among employees who travel and entertain on behalf of the business.

Cards can be set to control expenses and can further provide improved visibility of spend. Spend data can be linked to a company's expense management solution (EMS), enhancing spend and expense reporting and streamlining processes.

Depending on the corporate card solution selected, there is a range of standard and optional features that can be leveraged within the card programme, benefitting both the company and the employee.

In addition to selecting the right corporate card product for the organisation and employees, it is essential that companies adopt a T&E programme that is easily understood by all levels of staff and which is implemented without exceptions. Managers should be held accountable for their staff and there must be firm and swift consequences for any misuse to ensure that an apathetic environment does not encourage abuse of the corporate card and T&E expense reporting.

The beauty of a corporate card means having visibility of spend and the ability to immediately uncover and assess anomalies, and avoid waiting months to discover any unethical behaviour. Adopting a corporate card solution supports agility and enables employees to execute their duties within their budget and to easily feed spend information into an ERP system.

A corporate card solution will not only assist in regaining control over expenditure, but will also eliminate unnecessary paperwork and administrative efforts, all of which collectively contribute to reducing costs.

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