Signs There Are Problems With Your Corporate Expense Program
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Signs There Are Problems with Your Corporate Expense Program

 
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According to a study from the Association of Certified Fraud Examiners, expense reimbursement fraud makes up about 15% of all business fraud, and it leads to a median annual loss of $26,000.

It’s not just intentional fraud that leads to issues for companies either. There are unintentional problems with mismanagement and an overall lack of clarity as to the parameters of employee expense accounts and programs, and these also add up to a lot of problems with cash flow and financial loss.

The following are some of the signs there could be a problem with expense management in a corporation, whether intentional or unintentional.

Employees Can’t Access Expense Software On-the-Go

If your company is using automated expense software, but it doesn’t have mobile functionality, it’s a problem. A lot of companies think that if they’ve automated expense management  that’s enough, but employees need to be able to enter key information when they’re on-the-go and when it’s on their mind.

It needs to be convenient for employees in order to keep them motivated to keep up with policies and submissions, so if you have a software solution without mobile access and approvals, it’s a problem.

Time and Money Is Being Wasted in Administration

Another huge red flag that you have an expense management problem is not having software or automation at all.

If you have an AP department that’s inundated with expense reports, spreadsheets and paper receipts, it’s time to find a new way to do things.

When you've not automated your expense management through software, it leads to things falling through the cracks, and you’re using resources in an inefficient way, which means your expense program is likely costing you a lot more than it should.

There Are Cash Flow Issues

If you’re in the midst of cash flow issues, it’s time to reevaluate your current way of doing things when it comes to your expense program. Your employees might be taking too long to submit reimbursements if this is the case, and the company may owe them a lot of money at one time, making cash management tough.

Your Expense Rules Are Too Broad

Successful companies need to make sure they have highly specific and also tailored expense and spending programs and standards in place.

This means that there needs to be divisions based on roles and different scenarios, so it’s important to make sure you’re using the right software solution that makes this easy.

Expense reporting systems need to deliver precision, and your program guidelines need to do the same. Otherwise, when there’s confusion there’s often frustration and people will tend to overspend simply because they’re unclear on policies.

There Are Discrepancies In Employee Spending

Finally, another red flag that may appear when you have an inefficient expense program are big discrepancies in employee spending, particularly among employees who have similar positions.

This may be the result of fraud, but it can also often be attributed to a lack of clarity. If you see spending trends that divergent from one another when they should be the same, you may look at the individual employee, but you might also look at your policies and procedures.

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