How To Reduce Corporate Credit Card Fraud and Overspending

business Credit Card Expense Reports Reduces Fraud and Spend

Corporate credit cards can be useful, but traditional cards leave the door open to overspending and fraud.

For example, in 2019, a tech analyst used his corporate credit card to pay $21,000 at an adult club. He submitted the expense to his company without even without thinking. Needless to say, his employer was not pleased and ended up suing him!

Corporate credit card fraud and overspending is always a risk for businesses. Organizations with hundreds of employees spend endless hours reviewing and auditing credit card expense reports. But even then, it’s difficult to be 100 percent sure that every reimbursement or expense is accurate.

Corporate credit card fraud and overspend can drain thousands of dollars annually, putting any business in jeopardy. Plus, outdated expense processes drain energy, effort, and resources — without guaranteeing accuracy.

A modern solution with the ability to issue clear reports in real time can help businesses navigate these risks.

Credit Card Expense Reports and COVID-19: Employee Spending Sprees and Fraud

COVID-19 caused a shift to remote working all around the world. Remote working reduces costs and overhead, so for the most part employers were happy to provide resources for employees to work productively from home.

Unfortunately, access to corporate funds was too much of a temptation for some people.

According to Oversight’s Spend Insights Report (Nov. 2020), fraud increased by 57% between Q2 and Q3 in 2020. Most of the violations were expenses for buying computers and electronics (i.e., someone from your customer support team buying a portable speaker under the guise of office supplies).

The report highlighted risky and irregular buying habits and purchases by 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 fraud and tracking expenses to ensure accurate reimbursements.

Here’s how you can reduce fraud, cut overspending and streamline your credit card expense reports.

How to Reduce Fraud, Cut Overspending, and Streamline Expense Reports

Use Virtual Cards

Using virtual credit cards instead of physical ones is a great way to reduce violations. Providers like Mesh 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 be notified of suspicious expenses instantly and take action right away.

You can also view vital information like cardholder and approver details, receipts or invoices, and more. Organizations can ensure each expense is accurate  without hours of review.

Set Up Purchase Approvals

Businesses can bring down expense violations and stay on budget by requesting purchase approvals before all transactions. If an employee wants to spend, they will need to first get approval from a manager or supervisor.

Virtual credit cards enable employees to seek instant approval. 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’s approval.

Employees are less likely to violate rules when they know every expense is visible to their manager.

Get 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 fraud before it occurs.

A spend management solution acts as the central platform to manage all expenses. You can keep track of unlimited virtual cards and expenses for all employees in real time.

One way a spend management tool like Mesh can reduce fraud is by automating receipt collection. Businesses can match all receipts with payments to identify any gaps. The tool automatically collects electronic receipts and will remind your employees to submit receipts until 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.

Analyze Expenses

Analyzing your credit card expense report is key to understanding 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 fraud, payment intelligence works well to track spending patterns, suspicious transactions, and duplicate expenses. You can zoom in on every expense and strengthen your understanding of how your employees are spending — and ensure that your company is not overspending.

Businesses should also issue an expense policy to reduce spending violations.

Final Thoughts

Expense violations are on the rise post-COVID. Businesses need to be proactive in identifying and preventing credit card expense report fraud and overspending. 

You can use virtual cards and a payment management system to cut down the risk of fraudulent transactions. Additionally, you can scan your expense reports for insights to understand unusual or suspicious behaviors. 

Businesses can also set up pre-approvals to check uncontrolled expenses.

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