“If you think compliance is expensive, think about what non-compliance is costing you?”
These words become more poignant in a scenario where a typical company has 20% out-of-policy spending. With policies not being stringent enough, compliance is a farther thought.
Now out-of-policy spending can create a small but significant hole in a big ship
Fraudulent and non-compliant spending can prove to be a highly-expensive cross to bear for most global organisations. What’s more, in a connected world, business travellers take on the skies today more than ever – in this aspect, India could be among the top 6 business markets by 2019. Purchases beyond airfare, lodging and automobile rentals can often be a grey area where spends can spiral out of control. In fact, it is perhaps not so surprising that 82% of fraudulent activity was made by only a handful of employees which is just 5%.
How to fix this rampant issue?
A Travel & Expense Spend Analysis Report (2014) by Oversight attempts to simplify the problem. Of the $1 billion in transactions analysed for this report, only 1% of transactions were flagged as potentially fraudulent. Thus, creating a culture of travel and expense compliance where their employees understand the policies can be a good start. A simple integrated Travel and Expense Management system can enable this as it is automated and makes it easier to achieve compliance.
It also makes sense to look for repeat offenders. 11% or roughly 1 in 10 travellers in the same Oversight study triggered an exception multiple times. Again, a vigilant Travel and Expense Management system can enable this. It can help track out-of-pocket and duplicate expenses efficiently and flag frauds.
Automated systems lead to higher travel policy compliance
Each time a best-in-class company chooses corporate travel & expense management automation, it experiences a 31% higher rate of corporate travel policy compliance. They can actually measure the degree of compliance in spending, enabling them to measure policy compliance by department, by spend category, by employee. Compliance goes to a whole new level.
An integrated Travel and Expense Management system can drive effective compliance. It helps flag entertainment expenses above normal levels, highlight potential issues for management and ensure peace of mind.
Clearly, Travel and Expense Management allows corporates to be in tune with Government legislations, helps meet Income Tax, GST Compliance and other regulatory, and stand up to legal scrutiny at any time. It also enables traveling employees to trade the inefficiencies of outdated expense spread-sheets and receipt handling for speed, productivity, and compliance. To get 44% better compliance when you use end-to-end travel and expense solutions, contact us.