A report by the Association of Certified Fraud Examiners states that global enterprises lose $7 billion annually to workplace fraud, with expense reimbursements being one of the most commonly used fraud and corruption schemes across regions (from 9-17%) and across industries (from 7-30%).
Financial loss from fraudulent and non-compliant travel and expense (T&E) claims is significant. T&E leakage adversely impacts a company's bottom line, as T&E spend accounts for 6-12% of companies' annual spend. Government agencies are clamping down on non-compliance by monitoring spend more closely – and firms that fail to meet the new standards face hefty fines, loss of market reputation, and trust. As anti-bribery and anti-corruption (ABAC) regulations across the globe continue to evolve and become more stringent, organizations are actively looking to expand regulatory risk coverage to T&E reimbursements as it has been a channel for routing bribes and improper payments.
Based on our recent survey, more than 50% of companies still relied on costly and inefficient manual T&E audit processes and only perform receipt validation and policy compliance checks.
Most organizations cited disparate T&E data sources and formats (Concur, Workday, Oracle, legacy systems, Excel worksheets) as limiting to the ability to have a unified approach. And many identified decentralized T&E review across operating geographies, languages, and other regional nuances as another big challenge.
The high deployment cost of digital technologies such as artificial intelligence (AI) and analytics without a definite ROI measure was also seen as a barrier against moving to analytics-based audit solutions.
Add the lack of expertise in the risk and compliance function to perform root cause and spend pattern analyses, and it becomes impossible for organizations to drive policy, process, and behavioral changes to enable compliance.