Expenses Software Management to Prevent Employee Fraud

Fraud comes in many forms and hits businesses small and large. At the same time, surveys have indicated that employee monitoring can create a lack of trust in the workplace. How can companies best approach this tricky balancing act between protecting their interests and fostering good relations within their organisations? The rise of data-loss detection tools and expenses software great potential for reducing the risks to SMEs while maintaining transparency with employees.

All Shapes and Sizes

Cifas, a nonprofit UK company that works with businesses, charities, and public institutions to detect and prevent financial crime, report that the vast majority of staff are honest. There’s a “but” of course. The small number of employees who are successful cost companies millions of pounds per year.

Organisations with employees who travel for sales calls or to conferences and trade shows often experience small-bore scams, which can be quite varied and show real creativity on the part of the perpetrator. Some common ways of skimming pounds include getting blank taxi receipts that the employee fills in for over the real amount; having someone else pay for a meal and then submitting the receipt for themselves; purchasing alcohol against company policy and having waiting staff modify the bill; and over-reporting mileage.

Thefts of computers or other equipment often occur quickly after months of planning, with the perpetrator resigning quite suddenly and disappearing. Theft of customer payment or other financial or personal data can occur over the course of months or even years. Companies should take note if an employee shows a sudden change in disposition or behavior, insists on handling certain accounts, or begins keeping unusual hours. But they need to do due diligence as well, so as not to make false accusations.

An Ounce of Prevention

If your company is considering adopting an online system, purchase one that allows your accounting department to create policies and employee groups. By assigning staff to certain categories and having allowable expenses and limits visible to all, companies can encourage everyone to remain on their best behavior without looking like they’re snooping ­– and they will decrease the chances that they will need to snoop later on.

Internal theft of personal and financial data is a major worry for all types of companies that deal with sensitive information. Data-loss software can flag certain types of information and detect and alert when, for example, a suspicious volume of email is being sent with that information. Employees have been caught and prosecuted due to being flagged by data-loss systems.

The Costs

The damage from fraud goes much deeper than the cost of a few rounds at the pub. Loss of customer trust, the temptation by companies to view all employees with suspicion, time (and thus money) spent on legal action outside the core business, the need to create new policies or purchase new protective software: a small business can find it hard to recover from costs like these. Act first, for example by investing in the right expenses software and data-loss prevention, so you don’t have to react later.