From PYMNTS.com, “In the quest to grab greater control over and visibility into company spend, Alex Bean, co-founder and COO of expense management company Divvy, said strategies must be proactive, not reactive.
“Other solutions are spend money first, ask for forgiveness later,” he recently told PYMNTS. “The accountants are waiting for receipts to come in at the end of the month; they have to chase them down and react to expenses coming in.”
“That’s all exacerbated by people using their own personal cards [for company expenses],” he continued. “Companies have no control over the purchase, no view of what’s happening.”
This creates an environment in which employee fraud can thrive. Research from Statistic Brain released earlier this year calculated employee theft amounts to about $50 billion stolen from small businesses every year, with 75 percent of employees having reportedly stolen at least once from their employer. Separate research from Hiscox found businesses of all sizes lost an average of $1.13 million each from employee theft last year alone.
Interestingly, Bean told PYMNTS that most corporate controllers are actually more concerned about reconciling than they are about accounting for every dollar of employee spend.
“They’re just trying to close at the end of the month so they can move to the next one,” he explained. “Because of that, there is a fair amount of fraud.”
Making the problem worse is that there is a disconnect between departments, Bean added.
“Accounting doesn’t actually know how much sales should be spending on a service, just a ballpark,” he said.”