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Article Check - What is Company Fraud and How Do You Stop It? (Part 2 of 2)
In an environment where more and more people are leaving the “security” of a steady, corporate job to hang a shingle as an independent, the difference between those that succeed and those that fail can often be related directly to how much people are willing to invest in themselves.Putting “skin in the game” is an expression that conveys how far you will go to prove that you are invested in the business. I’ve met so many independents that seem to think that an idea, a cell phone, and an old computer entitles them to contracts but I have found that the people who do best on their own have made significant investments in themselves before expecting others to invest in them (buying projects or infusing capital.) Over the past ten years, I have come up with a list of "no-brainers" that I think every consultant should keep in mind when deciding to go out on his own.9 No-Brainer Non-Negotiables Keys to Success as an Independent Consultant1. Give your company name real thought 2. Get a separate business phone line, internet
Corporate Expense Management Software
Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A good corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).
When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Information can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.
And finally, before choosing your corp
I'm sure by now you are aware of the effects of the residual income.It is an all-empowering concept for those who have mastered it.There are many ways to start a residual income stream:1) Dealing In Real EstateThis is out of the league for most people. You would have needed to acquire a massive income before you can deal with this. Still, I know of people who dread paying property managers or having to maintain houses.Instead of buying real estate, however, you can sell real estate. Still, this requires a lot of work, sales skills, and moving around the country. It isn't what I call real residual income.2) Becoming An Insurance SalesmanYou can be cold calling all day long and not making a single sale. Cold calling is one of the worst and most silly ways to build a business. Who is interested in buying insurance in the middle of dinner or the latest episode of the Amazing Race? Not me.3) Network MarketingThis is a great way to build a residual income business. But it takes a lot of people
There are two main steps required to stop fraud in your company: Step 1 - identify your fraud risks; Step 2 - implement corporate expense management software controls to minimize those risks.
STEP 1 - Identify Your Fraud Risks
Is your company vulnerable to any of the following?
- Variances between hardcopies and computerized reports;
- Departure and return airfare on different dates but with no corresponding hotel expenses;
- Meals on weekends or in non-work locations;
- Poor descriptions and incomplete documentation such as a missing boarding pass, itinerary or receipt;
- Dates out of sequence;
- Old receipts;
- Nasty or inconsistent explanations to questions regarding claims. A common response is "how dare you question me?" ;
- Copies;
- Altered receipts;
- Credit card statements or printouts instead of receipts;
- Airline tickets:
- Employees have been known to pay for airline tickets using frequent flyer points and then claim the cost of a ticket as an expense from the company. This can be considered a fraudulent activity;
- There are numerous mechanisms employed to defraud an organization through the use of airline tickets. Organizations need to be diligent when dealing with airline ticket exchanges, refunds, partial refunds and possibility the flight being claimed was not taken (evidence of car rental, parking at the home airport, meals or other expenses in the destination are not present).
- Duplications to watch out for:
- These may not be identical amounts as in the case of partial hotel bills;
- Past due charges on mobile phone bills;
- The same expense may be reported twice in one period or in two or more periods with a different description and coding.
- Claiming personal items can also be a source of fraud against the company. These can include:
- Travel for family members;
- Retail or personal purchases;
- Excursions added on to business trips;
- Extra days in a hotel, car rental etc.;
- Gift shop, massages, etc. may be included on a hotel bill;
- Non-authorized trips.
- Organizations should also be diligent in identifying expenses being claimed that were not incurred. This is especially relevant when related to the claiming of meal expenses and meal per diem expenses;
- Inconsistencies such as taxi and rental car claims for the same portion of trip or mileage calculations that are clearly inflated;
- Overstatements may or may not be deliberate, however they include typographical errors ($34.95 reported as $3,495) and incorrect exchange rate conversions.
There are numerous other less obvious activities that fail to comply with legislative and/or company policies. Examples of these failures include improper coding, such as: hotel bills that include meals, phone, etc., that are reported as lodging; car rental which may not fall into a company authorized class; and the use of prohibited vendors.
STEP 2 - Implement Corporate Expense Management Software Controls
In order to minimize the risk of fraud in your company, your corporate expense management software controls should be designed to provide and support the 5 W's (Who, What, Where, When, and Why). They must ensure that all reasonable, authorized expenses incurred in order for a staff member to perform their job responsibilities are paid with the corporate credit card and documented with an original, valid, unaltered receipt, and they must be implemented throughout the entire organization, at all levels and in all functions.
In practice, these corporate expense management software processes, controls, and procedures are very broad. They relate to items such as approvals, authorizations, verifications, reconciliations, segregation of duties, reviews of operating performance, background investigations, and physical security. They need to be embedded in your day-to-day management and monitoring processes, and they need to also leverage available information technology.
Segregation of Duties as a Corporate Expense Management Control
Given the nature of accounts payable and the related functions, segregation of duties is a crucial consideration. Following is a partial list of duties related to accounts payable and how they should be segregated.
- The person responsible for bank reconciliation should not:
- Handle unclaimed property reporting
- Be a signature on a bank account
- The person who is check signature should not:
- Authorize invoices for payment on an account that he/she is also a signature
- Have ready access to the check stock.
- A person who is responsible for the check stock should not:
- Be an authorized signature
- Handle the bank reconciliations
- The person responsible for the master vendor file should not:
- Be an authorized signature
- Be able to approve invoices for payment
- Handle unclaimed property
- Individuals responsible for accounts payable functions should not also be responsible for accounts receivable.
Other Corporate Expense Management Controls
Some other corporate expense management controls that are helpful in combating fraud include:
- Requiring business purchases be made on a corporate credit cards
- Monitoring transactions on the corporate credit cards
- Direct pay of corporate credit cards
- Pre-population of corporate credit card data in expense report preparation
- A good system of approvals to prevent unauthorized reimbursements
- A thorough review of an individual's expenses over a period of time
- Implementation of a PostProcurement environment (historically we have been working in a pre-procurement environment (Purchase Requisition, Order, Receipt, Remittance, 3 Way Matching, Journal, etc.) which can lead to at least 20% of transactions being disputed.)
Corporate Expense Management Software
Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A good corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).
When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Information can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.
And finally, before choosing your corpo
What do creativity managers do?Replace the word management with the word optimisation.That's what creativity managers do: they optimise the quality of the idea pool (creativity) and the implementation process (innovation).There are many methods of optimisation and the creativity leader must be aware of all of them, in other words, he or she must synthesise them for optimal effect.Areas [within creativity] that need managing include motivation, organisational culture, organisational structure, incremental versus radical effects and processes, knowledge mix, group structures, goals, process and valuation.Areas [within innovation] that need managing include idea selection, development / prototyping and the art of commercialisation.It is worth noting that 4000 good ideas result in 4 development programs, which in turn results in 1 winner.The industrialisation of Creativity and InnovationThere is an argument that creativity managers attempt to industrialise creativity. The implication i
- These may not be identical amounts as in the case of partial hotel bills;
- Past due charges on mobile phone bills;
- The same expense may be reported twice in one period or in two or more periods with a different description and coding.
- Travel for family members;
- Retail or personal purchases;
- Excursions added on to business trips;
- Extra days in a hotel, car rental etc.;
- Gift shop, massages, etc. may be included on a hotel bill;
- Non-authorized trips.
There are numerous other less obvious activities that fail to comply with legislative and/or company policies. Examples of these failures include improper coding, such as: hotel bills that include meals, phone, etc., that are reported as lodging; car rental which may not fall into a company authorized class; and the use of prohibited vendors.
STEP 2 - Implement Corporate Expense Management Software Controls
In order to minimize the risk of fraud in your company, your corporate expense management software controls should be designed to provide and support the 5 W's (Who, What, Where, When, and Why). They must ensure that all reasonable, authorized expenses incurred in order for a staff member to perform their job responsibilities are paid with the corporate credit card and documented with an original, valid, unaltered receipt, and they must be implemented throughout the entire organization, at all levels and in all functions.
In practice, these corporate expense management software processes, controls, and procedures are very broad. They relate to items such as approvals, authorizations, verifications, reconciliations, segregation of duties, reviews of operating performance, background investigations, and physical security. They need to be embedded in your day-to-day management and monitoring processes, and they need to also leverage available information technology.
Segregation of Duties as a Corporate Expense Management Control
Given the nature of accounts payable and the related functions, segregation of duties is a crucial consideration. Following is a partial list of duties related to accounts payable and how they should be segregated.
- The person responsible for bank reconciliation should not:
- Handle unclaimed property reporting
- Be a signature on a bank account
- The person who is check signature should not:
- Authorize invoices for payment on an account that he/she is also a signature
- Have ready access to the check stock.
- A person who is responsible for the check stock should not:
- Be an authorized signature
- Handle the bank reconciliations
- The person responsible for the master vendor file should not:
- Be an authorized signature
- Be able to approve invoices for payment
- Handle unclaimed property
- Individuals responsible for accounts payable functions should not also be responsible for accounts receivable.
Other Corporate Expense Management Controls
Some other corporate expense management controls that are helpful in combating fraud include:
- Requiring business purchases be made on a corporate credit cards
- Monitoring transactions on the corporate credit cards
- Direct pay of corporate credit cards
- Pre-population of corporate credit card data in expense report preparation
- A good system of approvals to prevent unauthorized reimbursements
- A thorough review of an individual's expenses over a period of time
- Implementation of a PostProcurement environment (historically we have been working in a pre-procurement environment (Purchase Requisition, Order, Receipt, Remittance, 3 Way Matching, Journal, etc.) which can lead to at least 20% of transactions being disputed.)
Corporate Expense Management Software
Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A good corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).
When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Information can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.
And finally, before choosing your corp
Banner Stands are an attractive and convenient way to showcase products and messages to a target audience. They are usually portable and flexible structures and carry attractive graphics.One of the popular types of banner stands is the retractable banner stand. Easy to use, retractable banner stands work like a window blind- simply slide up the graphic over a pole and secure it. Retractable banner stands are also called roll up banners.These banner stands are ideal for trade show displays. Because the printed graphic is stored inside the base, assembling and re-assembling is easy and takes little time. Retractable banner stands take about a minute to set up. All that is required is extending the pole and raising the banner.Retractable banner stands also protect the printed graphic during transportation as it is secured at the base. Retractable stands like roll up stands exhibit displays and pop-up displays are ideal for exhibitions and trade shows.There are two types of indoor banner stands – pole and retractable. Of these
There are numerous other less obvious activities that fail to comply with legislative and/or company policies. Examples of these failures include improper coding, such as: hotel bills that include meals, phone, etc., that are reported as lodging; car rental which may not fall into a company authorized class; and the use of prohibited vendors.
STEP 2 - Implement Corporate Expense Management Software Controls
In order to minimize the risk of fraud in your company, your corporate expense management software controls should be designed to provide and support the 5 W's (Who, What, Where, When, and Why). They must ensure that all reasonable, authorized expenses incurred in order for a staff member to perform their job responsibilities are paid with the corporate credit card and documented with an original, valid, unaltered receipt, and they must be implemented throughout the entire organization, at all levels and in all functions.
In practice, these corporate expense management software processes, controls, and procedures are very broad. They relate to items such as approvals, authorizations, verifications, reconciliations, segregation of duties, reviews of operating performance, background investigations, and physical security. They need to be embedded in your day-to-day management and monitoring processes, and they need to also leverage available information technology.
Segregation of Duties as a Corporate Expense Management Control
Given the nature of accounts payable and the related functions, segregation of duties is a crucial consideration. Following is a partial list of duties related to accounts payable and how they should be segregated.
- The person responsible for bank reconciliation should not:
- Handle unclaimed property reporting
- Be a signature on a bank account
- The person who is check signature should not:
- Authorize invoices for payment on an account that he/she is also a signature
- Have ready access to the check stock.
- A person who is responsible for the check stock should not:
- Be an authorized signature
- Handle the bank reconciliations
- The person responsible for the master vendor file should not:
- Be an authorized signature
- Be able to approve invoices for payment
- Handle unclaimed property
- Individuals responsible for accounts payable functions should not also be responsible for accounts receivable.
Other Corporate Expense Management Controls
Some other corporate expense management controls that are helpful in combating fraud include:
- Requiring business purchases be made on a corporate credit cards
- Monitoring transactions on the corporate credit cards
- Direct pay of corporate credit cards
- Pre-population of corporate credit card data in expense report preparation
- A good system of approvals to prevent unauthorized reimbursements
- A thorough review of an individual's expenses over a period of time
- Implementation of a PostProcurement environment (historically we have been working in a pre-procurement environment (Purchase Requisition, Order, Receipt, Remittance, 3 Way Matching, Journal, etc.) which can lead to at least 20% of transactions being disputed.)
Corporate Expense Management Software
Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A good corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).
When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Information can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.
And finally, before choosing your corp
When a disaster strikes—whether it be a hurricane, earthquake, flood, terrorist attack, or some other devastating event—many businesses are eager to volunteer and assist those in need. They want to help rebuild the damaged homes and businesses, and they often donate the necessary materials and manpower to do so. Unfortunately, the resources that are brought in on a volunteer and donation basis typically run out much sooner than expected. And very often, those businesses who gladly gave their time and resources to those in need feel guilty charging for additional services, so they pack up and leave the area, proud of their good deed, yet leaving those in the disaster area with few recovery options.A great example of this is what happened in Port Charlotte, Florida after hurricane Charley. Initially after the hurricane, a large number of contractors went to the area, donating services, supplies, and other things needed to rebuild the community. The federal government also came in and paid many of the rebuild bills, even things not normally cover
Given the nature of accounts payable and the related functions, segregation of duties is a crucial consideration. Following is a partial list of duties related to accounts payable and how they should be segregated.
- The person responsible for bank reconciliation should not:
- Handle unclaimed property reporting
- Be a signature on a bank account
- The person who is check signature should not:
- Authorize invoices for payment on an account that he/she is also a signature
- Have ready access to the check stock.
- A person who is responsible for the check stock should not:
- Be an authorized signature
- Handle the bank reconciliations
- The person responsible for the master vendor file should not:
- Be an authorized signature
- Be able to approve invoices for payment
- Handle unclaimed property
- Individuals responsible for accounts payable functions should not also be responsible for accounts receivable.
Other Corporate Expense Management Controls
Some other corporate expense management controls that are helpful in combating fraud include:
- Requiring business purchases be made on a corporate credit cards
- Monitoring transactions on the corporate credit cards
- Direct pay of corporate credit cards
- Pre-population of corporate credit card data in expense report preparation
- A good system of approvals to prevent unauthorized reimbursements
- A thorough review of an individual's expenses over a period of time
- Implementation of a PostProcurement environment (historically we have been working in a pre-procurement environment (Purchase Requisition, Order, Receipt, Remittance, 3 Way Matching, Journal, etc.) which can lead to at least 20% of transactions being disputed.)
Corporate Expense Management Software
Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A good corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).
When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Information can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.
And finally, before choosing your corp
We - modern America that is - have become so damn impolite. We don’t give people the simple courtesy of a reply when contacted by email or phone. The idea of acknowledging someone with a smile while passing on the street is at best an anachronism; at times it’s even considered an affront. And being greeted when entering a store is less commonplace all the time. What are we becoming (or have already become)? Furthermore, these simple common courtesies are disappearing from the very vocabulary and experiences of the young adult and teenage populations among us. (In fact, only be an older person could write this piece from direct experience.)What does any of this have to do with hats or e-commerce, you may ask. Stores are guilty - big time - of contributing to this decline. Businesses/employers run the daily social show in America; they are obliged to set an example and lead with integrity. This is a separate issue from Enron/WorldCom law-breaking type activity (although greed is not unrelated to this deterioration). Being polite and
Corporate Expense Management Software
Corporate expense management software automates the management of expense claims, significantly reducing the risk of error or fraud and comprehensively managing all purchasing data. A good corporate expense management software solution can reduce processing costs by as much as 90%, so the payback period is tangible and measurable (often less than 6 months).
When choosing a corporate expense management software solution, ensure that it can manage digital data from a range of B2B transactions including purchasing cards, travel expense cards, fleet cards, mobile phones, and Internet purchasing. Information can then be integrated into operating systems including human resources, accounts payable, general ledger, and ERP. Furthermore, make sure that it accommodates all major credit card transactions, that it is non-bank specific, and that it can operate with the world's leading ERP systems.
And finally, before choosing your corporate expense management software solution, consider the fact that technology is not the entire story in achieving corporate expense management outcomes. Cultural issues, resistance to change and corporate ownership are the greatest barriers to the growth of card programs and the realization of benefits. You must be confident that your corporate expense management software solution provider has a customer-focused consultancy based approach to client relationships of which technology is only one very important part.
Conclusion
Fraud is a significant cost to many (if not most) companies. But it doesn't have to be. By identifying your fraud risks and implementing appropriate corporate expense management controls and corporate expense management software, you can very effectively minimize your fraud risks. And with the right corporate expense management software solution, ROI within 6 months is very achievable.
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