This post is by Varun Rathi, Co-Founder, Happay
“A company loses 5% Revenue in Expense Frauds.” (ACFE Report ,2016)
Shocking,right? While it’s easy to believe a few rupees here and there won’t hurt, expense frauds can accumulate to a substantial amount over time.
What’s equally surprising as the value of expense frauds is the time taken to detect them. The ACFE Report 2016 also states, it takes 18 to 20 months to detect expense frauds. Sadly, only 49% of the companies are able to recover losses even after detection of these frauds.
The most common form of expense fraud is fake receipts. Others include overstating claims (e.g. mileage) and claims for cancelled expenses (e.g. cancelled airfare). Employees also defraud employers through double dipping (claiming a single expense from multiple sources) and passing off personal purchases as business spends.
Often, the people who you least expect to commit fraud are the ones actually doing so. A recent survey conducted by the Association of Certified Fraud Examiners revealed that employees comprising the “Executive/Upper Management” level in a company account for nearly 27 percent of expense reimbursement fraud cases.
Take a look at this infographic to get an idea of the ‘pain’ expense fraud can be for a business like yours.
Now that you know ‘why expense frauds can’t be ignored’, you definitely must learn ‘how you can combat them or better still – stop them from happening in the first place.
Expense Frauds may start small, say with an employee fudging a receipt.
If it goes unnoticed, he may do it again and when more employees are involved in expense frauds at the same time- this could be catastrophic for your business!
Most occasions of expense frauds can be entirely avoided if caught early.
Learn how to eliminate expense frauds with this free e-book: Fraud Prevention is Better Than Cure – 5 Ways To Eliminate The Possibility Of Expense Frauds
About the Author
Varun Rathi is the co-founder of Happay. Happay is an automated expense management solution that gives you end-to-end visibility and control over business spends on one single platform. Happay also automates expense policy enforcement helping you to eliminate expense frauds and leakages across the board.
Disclaimer: This column is powered by HappayCategory Business