Business Entrepreneur

Employee fraud: 6 ways to protect your business

avoiding employee fraud

Employee fraud comes in many forms, but there are means to protect your business right now by not only modernizing, but by being more specific with company policies.

avoiding employee fraud

Is there employee fraud at your company?

Employee fraud comes in many forms, be it widespread embezzling schemes to slipping extra cash for morning donuts, and regardless of the size, money leaks are never healthy for your business. Eric Sikola, General Manager of ExpenseCloud notes there are six ways to protect your business from employee fraud, noting there are some simple ways to curb common money leaks.

6 ways to protect your business from employee fraud

Sikola says there are six ways to protect your business right now:

  1. Establish expense policies that include systems for flagging possible policy violations, such as receipts exceeding a certain dollar amount. By setting thresholds and requiring expenses in excess of those limits to have a second review, you can eliminate the risk that these high-dollar expenses will slip through the cracks.
  2. Require itemized receipts for billing categories that are subject to easy deception, such as meals or lodging, to avoid picking up the tab for a night of straight imbibing or a lovers’ weekend getaway. Every establishment will provide itemized receipts and employees with nothing to hide should have no problem including them with the expense report.
  3. Request that names of attendees at a business meal or entertainment function are listed on expense reports. Even if you never do call them and verify the event, the fact that you could will be enough to keep employees on the up-and-up. Plus, it gives you an opportunity to compare the cost of the entertainment with measurable results.
  4. Implement a corporate card program that sets value limits for expense categories against which employers can compare receipt amounts. Instead of a blank check, setting limits helps guide employees in making reasonable choices (caviar or flounder?) and helps the company better plan for expenses.
  5. Require that physical addresses of starting location and final destination be identified in mileage reports. Simply stating “Chicago” leaves a lot of room for interpretation — employees could drive around town running personal errands all day and include that mileage in the expense report.
  6. Replace Excel or paper-based expense reporting processes with an automated platform that combines all of the above functions in a single, simple, foolproof system. Automating the entire process not only makes expense entry and approval more accurate and less prone to error or fraud, but it also makes the administrative process itself faster, easier and more efficient.

Be it asking team members to better document their expenses or implementing new policies, plugging financial leaks will help your business to perform at its potential.

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