- Point of view
Stepping beyond traditional T&E audit and compliance reviews
Making the move from reactive to proactive checks to minimize fraud and regulatory exposure, and prevent spend leakages
As organizations recover from the initial shock of COVID-19, they are looking to build stronger, more resilient businesses while keeping an eye on cost. And at the same time, regulators are anticipating an increase in fraud and corruption cases. They are more vigilant than ever, committed to investigating and penalizing noncompliance.
Travel and entertainment (T&E) transactions are highly vulnerable to noncompliance and fraud. It's not unheard of for employees to claim non-business-related expenses or claim a personal expense on their company card. Left unchecked, incidents of noncompliance can increase cost substantially and snowball into multimillion-dollar penalties. For example, a leading pharmaceutical company had to pay a penalty of $490 million due to counterfeit fapiao (an official invoice recognized by the Chinese tax authorities) submissions. Bribes to doctors and healthcare professionals were being routed through T&E claims.
How your company chooses to manage its T&E audit and compliance process and the solutions you use can prevent spend leakage and avoid significant reputational damage in an environment where stakeholder trust is critical. And with digital technologies such as artificial intelligence (AI) and machine learning, you can transform T&E audit processes and enhance how you manage risk and meet regulatory demands, eliminating inefficiencies and plugging spend leakage that can deliver savings of up to 5% of your annual T&E expense.
In building a comprehensive T&E audit program, companies must overcome key challenges:
Digital and analytics can transform existing T&E audit processes, enabling companies to enhance their risk and regulatory coverage while also generating operational efficiencies and improving their user experience.
Within a T&E audit program, companies can embed digital technologies in a variety of ways to improve compliance and prevent spend leakage:
Digital technologies and analytics can improve efficiency, speed, and accuracy, but you still need a team of risk and compliance professionals to analyze and review exceptions and apply their judgment to any insights from the technology.
An audit or review is only complete when you've performed substantive reviews, meaning you've validated the exceptions, completed a root-cause analysis of the final gaps, and defined a remedial action plan. When organizations understand the source of noncompliance, they can act on it to minimize the likelihood that it may happen again by adjusting policies and encouraging behavioral change.
By combining automation and analytics with compliance expertise, companies can unlock new capabilities and transform their T&E audit processes. This enables them to:
Combining a data-driven, digitally enabled T&E audit program with risk and compliance knowledge, your company gains major advantages over standard methods. It can significantly increase your ability to monitor regulatory compliance and fraud and de-risk your organization.
By stepping beyond standard approaches with a complete, user-friendly, and industry-agnostic T&E monitoring solution, your company can benefit from actionable insights and feedback mechanisms that cut the time spent reviewing expenses, pay employees faster, reduce errors, improve cash flow, and enhance experiences.