In 2019, a tech analyst used his corporate credit card to pay $21,000 at an adult club. He passed on the expense to his company without any guilt and even without thinking. However, unsurprisingly, his employer was not at all pleased and ended up suing him!
Corporate credit card and expense frauds have always been a risk for businesses. Organizations with hundreds of employees waste endless hours reviewing and auditing credit card expense reports. Even then, you cannot be a hundred percent sure your reimbursements or expenses are accurate.
Credit card frauds can put any business in jeopardy and drain thousands of dollars annually. Additionally, the Stone Age expense processes drain energy, effort, and resources, while you can’t be sure of accuracy.
Credit Card Expense Reports During COVID-19 – Employee Spending Spree and Frauds
The coronavirus established the trend of working from home all around the world. Businesses were not totally displeased with the practice, as remote working reduces costs and overheads. As a result, employers were happy to provide resources for employees to work productively from home.
Unfortunately, the free hand to spend was too much of a temptation for some people.
According to Oversight’s Spend Insights Report (Nov 2020), frauds increased by 57% between Q2 and Q3 2020. Additionally, most of the violations were expenses for buying computers and electronics. So, Julia from your customer support team might have bought a portable speaker in the guise of office supplies.
The report highlighted the risky and irregular buying habits and purchases for employees worldwide. Moreover, the massive volume of expenses exposed businesses to twice as much risk in Q2 2020 compared to Q2 2019.
Reviewing your credit card expense reports is not enough to track violations. Businesses need to be more proactive in dealing with frauds and tracking expenses for accurate reimbursements.
Here’s how you can cut down frauds and streamline you credit card expense reports.
Use Virtual Cards
Using virtual credit cards instead of physical ones is a great way to reduce violations. You can use providers like Mesh to create customized e-credit cards with personalized limits and spending rules. Businesses can also create one-time cards to pay for approved expenses.
Mesh virtual credit cards give you real-time visibility into employee expenses as they happen. You don’t have to wait till the end of the month to get your expense report. Businesses can track suspicious expenses instantly and take timely action.
You can also view vital information like cardholder and approver details, receipts or invoices, and more. Organizations can ensure each expense is accurate and legit without spending hours on reviewing.
Set Up Purchase Approvals
Businesses can bring down expense violations by requesting purchase approvals before making any transaction. If an employee wants to spend, they will need to ask for approval from a manager or supervisor.
Virtual credit cards enable employees to seek instant approvals. The purchase will show up on the manager’s mobile or desktop for instant approval or denial. You don’t have to submit a paper request or wait for days for the manager to find time to approve.
Employees are less likely to be tempted to spend unwisely when they know every expense is under your scrutiny.
Go For a Spend Management Tool
Technology is an excellent way to reduce effort, increase accuracy, and boost productivity. It can also help you streamline your credit card expense report and kill frauds before they occur.
A spend management solution acts as the central platform to manage all expenses. You can keep track of countless virtual cards and expenses of all employees in real-time.
One way a spend management tool can reduce fraud is by automating receipts with Mesh. Businesses can match all receipts with payments to identify any gaps. The tool automatically collects electronic receipts and keeps on reminding your employees till they complete the task.
Managers can get instant notifications when a receipt is added with complete transaction information. As a result, they can detect fraud immediately and spot discrepancies when receipts don’t match transactions.
Analyzing your credit card expense report is key to understand spending behaviors. With Mesh, you get end-to-end payment intelligence to generate valuable insights about your expenses. Best of all, Mesh automates the whole process and provides you ready insights to take action.
Apart from frauds, payment intelligence works well to track spending patterns, suspicious transactions, and duplicate expenses. You can drill down on every expense and strengthen your understanding of how your employees are spending.
Businesses can then come up with a fitting expense policy to reduce violations.
Expense violations are on the rise post COVID. Businesses need to be proactive in identifying and preventing credit card expense report frauds. You can use virtual cards and a payment management system to cut down your risk and fraudulent transactions. Additionally, you can scan your expense reports for insights to understand risky behaviors. Businesses can also set up preapprovals to check uncontrolled expenses.