Leveraging Technology to Prevent Fraud

Electronic expense claim processing closes potential loopholes

  • Heightened international vigilance on corporate fraud is pushing companies to improve their internal processes
  • Manual expense claim processing has long been a weak link in corporate governance
  • Electronic expense claim systems enhance visibility and accountability resulting in improved compliance

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Corporate travel and entertainment comes with risks that vary from exceeding approved spending limits to more serious infractions of laws and regulations.

It may be a sensitive and challenging topic, but with increased enforcement of the US Foreign Practices Act, the UK Bribery Act and increasingly strict Chinese regulation of corporate entertainment, companies must improve their business processes to more effectively manage employee travel and entertainment spending.

Historically, business travel and entertainment has resulted in hard-copy expense claims that go through a manual process of reviews and approval that is invariably slow, time consuming and inexact.

Manual expense claim processing leaves loopholes for vague claims, such as an associate buying mobile phones or other electronic devices to give away as gifts. Exceptions to policy only add more time and effort to an already time consuming process. A questionable expense can become buried in the stacks of receipts and papers generated by a manual system, putting the company’s integrity at risk.

American Express’ Cathay Pacific Corporate Card Programme brings improved visibility and efficiency to the entire travel and entertainment process, reducing a company’s risk of non-compliance to corporate policy and legal regulations and improving the detection of potentially fraudulent spending.

Shure Asia’s Experience

Peter Schulz, Director of Regional Finance for Shure Asia Limited, has firsthand experience of how cumbersome and opaque traditional expense report filing can be. His company is a subsidiary of Shure Incorporated (www.shure.com), the Chicago-based audio electronics manufacturer, which distributes, sells and markets audio electronic products in more than 15 countries across Asia. That geographical footprint requires its associates to travel on a regular basis.

Amex_Leveraging_Technology_to_Prevent_Fraud_Quote_EN“It is easy to approve a claim at a high level, but to go over page after page of expense reports and receipts takes a lot of time and effort,” said Schulz. “Because it is a time consuming process, some of those reviewing and approving reports may not always give each expense detail the consideration it deserves or review the reports to the granular level required.”

Shure Asia engaged Concur, which provides travel expense management systems, in partnership with American Express, to design a new business travel and expense process that would support their existing internal controls and assist in managing and controlling its business risk.

“The American Express corporate card is not just our preferred form of payment, but our required form, because it brings the ability to audit every transaction. As soon as the card is used we have an immediate audit trail of the amount spent, who is charging it, the date of the purchase, the vendor and business purpose of the spending. The corporate card not only makes the lives of our travelling employees easier, but also gives us the visibility that we require from an internal control perspective.”

Control and Efficiency

Improved transparency of transactions and more efficient claims processing also acts as a preventative measure against unauthorised purchases.

“We follow the highest ethical principles in the conduct of our business, and we rely on our associates to respect this and behave accordingly. However, if people know a transaction is fully visible to other people, the temptation to violate the policy or make an unauthorised purchase is greatly reduced,” Schulz said.

American Express’ online portal has also given Shure Asia the ability to control spending limits specific to certain roles and needs.

“It means spending limits are more suitable to what the job requires rather than just giving blanket limits across the board.”

Much attention is given to the improved efficiency of expense report filing using American Express Solutions, as well as the enhanced Asia Miles benefits for both the company and employee. However, working with companies to improve safeguards against unauthorised purchases and improper expense claims is equally important for a company that is expanding its footprint across Asia.

“American Express has been a very supportive business partner as we have expanded in the region and we expect this to be a long and profitable partnership for both parties,” Schulz said.