Fraud allegations highlight the need for smarter expense management
from our US office
The potential dangers posed by employee expense fraud have been highlighted by recent allegations made against a former QVC executive.
A 35-page indictment released by the U.S. Attorney’s Office in Philadelphia accuses James Falkowski of a range of fraudulent activities during his time at the shopping channel company between 2008 and 2013.
The indictment includes allegations that he carried out ‘expense laundering’ to help finance a luxury lifestyle and pay for high-end clothing, spa treatments and even Botox treatment.
Together with other forms of fraud, he’s accused of receiving around $1 million in illegitimate expense costs and kickbacks. A lawyer representing Falkowski said his client was highly regarded at QVC and his client looked forward to answering the charges. High profile cases of expense fraud are what we see in the press, however, it’s the smaller scale incidents that take place everyday within a multitude of organizations that need to be addressed.
Expense Fraud Battle
While notable cases like this will occasionally hit the headlines, expense fraud is something that affects business throughout the nation on a daily basis. Without proper precautions, the practice of ‘stretching’ reimbursements can become a part of workplace culture.
It’s estimated that a business will typically lose around five percent of its annual revenue to workplace fraud, translating to global losses of $2.9 trillion each year.
It’s a problem that has been caused by bosses not having the tools or resources required to properly police employee costs. Traditionally, managing reimbursements has been a slow, inefficient and error-prone task.
Finance teams have had to manually handle expense reports, transferring information across multiple documents and Excel spreadsheets. With so much time and effort spent on processing, there has been insufficient focus on enforcing policies and policing costs.
For many businesses, reimbursements have proved so difficult to control that they take a pragmatic approach and simply accept a certain amount of losses each year to falsified and exaggerated reports.
Digital Fightback
But this is a problem which technology is helping companies to finally start tackling. Digital expense systems provide companies with the tools they need to being getting their employee reimbursements back under control.
A smartphone app allows a business traveller to instantly convert any paper receipts they receive into a digital format. From this point on, the whole reimbursement process can be handled virtually paper free.
It means that the old manual and paper-based ways of working are replaced with fast and effective automated processes. Switching to a digital system such as webexpenses will typically reduce processing times by 25 percent and cuts T&E spend by 10 percent.
The real-time nature of the systems means that businesses can also set alerts which are triggered whenever a reimbursement breaches any pre-set limits. These can be used to trigger an-screen notification or to block an out-of-policy cost.
So while the headlines may focus on high flying executives, the real story with expense reports is the way that companies throughout the U.S. are leading the fightback against fraud - tackling the problem instead of tolerating it.
Webexpenses provides a smarter way to manage and monitor employee expense reports and business travel. Find out more here.