Stop That! Compliance Tips from an Anti-Fraud Expert

Corporate fraud is not just costly; it can tarnish reputations, erode trust, and disrupt operations. With fraud schemes becoming more sophisticated by the day, organisations need a clear and proactive approach to combat them. Compliance isn’t just about following rules - it’s about creating a proactive robust framework that prevents fraud, protects reputations, and ensures accountability across all levels. 

In my years as a compliance and anti-fraud expert, I’ve encountered countless ways that fraud can slip through the cracks. At a recent customer event, I had the chance to share my insights on these issues. In this blog, I’ll cover some of the key takeaways from the day and offer actionable advice for building strong compliance practices.

 

Cracking the Code on Expense Compliance

Watch our on-demand webinar to discover key strategies for ensuring employee business spend compliance and learn how to streamline compliance in your organisation.

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Understanding the Types of Fraudulent Spending  

Fraudulent spending can come in many forms, often hiding in plain sight. Here are a few common types of fraudulent expenses that you need to watch out for, along with some real-world examples from expense claims we stopped in their tracks:

1. Personal expenses disguised as business spending: Employees might try to pass off personal costs, such as meals, travel, or entertainment, as business expenses or hide them within legitimate business trips. 

Example: A senior manager in one continent was in a personal relationship with a direct report based in another. She would arrange fake business meetings in "romantic cities” to pay for their personal visits. 

2. Excessive spending beyond policy limits: Spending that exceeds the company’s established limits, such as booking luxury hotels or expensive restaurants, without authorisation. 

Example: In one company, a senior manager took his team members for dinner, overspent on alcohol, and then “invented” additional guests to reduce the costs per person. 

3. Manipulated claims: Falsified or exaggerated expense reports, where employees inflate details or alter receipts to claim more than what was spent. 

Example: An employee would regularly purchase train tickets, refund them with the train provider, and still claim the original for the expense. 

Key Components of a Strong Compliance Policy 

A successful compliance policy is built upon clarity and consistency. Ensuring guidelines are clear and well-defined is essential for employees to understand exactly what is expected of them. Further, communication and regular education about any exceptions to these policies are crucial to prevent misunderstandings. 

A robust expense submission and approval process is another critical component. Setting a specific timeframe for expense submissions, not only standardises the process but also reduces the risk of out-of-policy expenses slipping through. Managers are typically the first line of defence against policy violations, as they are often responsible for reviewing and approving receipts. However, in a manual process, details can be overlooked, and violations can unintentionally occur. With Concur Expense, these details are automatically flagged if they fall out of policy – thus providing organisations with greater control over their compliance process. 

Training and open communication are essential to building a compliance-focused environment. Continuous training keeps compliance top of mind for employees, ensuring they stay updated on new policies and the importance of adhering to them. Open and approachable communication between compliance teams and employees fosters a culture of accountability, where everyone is encouraged to recognise and respect the impact of non-compliance. Informed employees are more likely to follow policies consistently, which ultimately makes the workforce stronger and more compliant. 

Finally, ethical leadership is essential to reinforce compliance from the top down. Leaders set the tone for an organisation’s culture, and their actions can significantly influence employee behaviour. The senior manager who consistently overspent on team dinners and alcohol as mentioned above is a clear illustration of how unethical behaviour at the top can permeate through an organisation and normalise non-compliance. In contrast, strong ethical leadership fosters a culture where compliance is valued and expected, establishing a foundation for a more honest, responsible workplace. 

Building a Culture of Compliance: Creating Barriers 

A key aspect of building a compliance-first culture is creating barriers that discourage unethical practices. In essence, making it easier for employees to do the right thing and harder for “bad apples” to exploit the system.  

Here’s a practical seven-step approach to help businesses strengthen their compliance efforts. 

1. Have a clear policy with a transparent channel for seeking approved exceptions 

2. Allow local variations to a global policy 

3. Require expenses to be submitted for reimbursement within 30 days of travel 

4. Education to frequent travellers 

5. Proactive analysis of top spenders to identify trends 

6. Require managers to take responsibility for approving spend 

7. Where there has been proven fraud, seek reimbursement of the embezzled amounts, even if the employee is ultimately dismissed 

A strong compliance culture doesn’t emerge overnight, but with these steps, it’s achievable for any organisation regardless of their starting point. 

 

Top Tips to Build a Culture of Compliance

Check out our tips to help you make sure you stay within policy, ahead of regulations and foster a compliance-driven culture.

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Leveraging Technology to Enhance Compliance  

Technology has transformed the compliance landscape, enabling us to tackle fraud with a proactive, data-driven approach. There are two key gaps where automation can make a significant impact by mitigating potential compliance risks. 

The first gap happens when employees submit expenses. Automated tools can flag unusual claims and policy violations instantly, stopping small issues from turning into bigger problems, and ultimately saving time and money. When employees see these automated checks in action, they’re more likely to follow the rules, building trust that the system is fair and consistent. This also discourages employees from deviating from the policy. 

The second gap occurs after expenses are submitted, when patterns in spending might reveal issues that aren’t obvious at first glance. For example, if someone is consistently spending right up to the maximum allowed, it could suggest they are intentionally manipulating their claims. Through pattern and trend analysis, using Concur Expense, organisations can identify potential concerns early, and address them before they impact the company financially or damage their reputation.

SAP Concur solutions can enhance your company’s compliance programme by providing tools that enhance your visibility and control on your employee’s expenses. 

To learn more about our solutions and best practices for compliance visit our compliance page.