Businesses in the UK are struggling to get to grips with expense fraud, according to a new SAP Concur survey. The “Hidden Cost of Expense Fraud and Non-Compliance” report takes a closer look at the challenges businesses are facing when it comes to expense fraud and revealed that just over a third (34%) of travel and finance decision makers in the UK understand what would count as a fraudulent expense claim.
This lack of awareness is also prevalent amongst UK employees and few employees are aware of expense policies and the implications of disobeying them, with under half (43%) aware of the travel expense policies their organisation has in place. Despite this lack of knowledge, just 34% of UK businesses have fraud awareness and prevention training in place for employees.
As a result of this, finance and travel teams are dedicating significant amounts of time to fighting fraud, when they could be focusing more strategic business activities. Teams in the UK are spending over two working days a week (20.1 hours) fighting fraud, which is the longest of all EMEA countries and far longer than the EMEA average of 17.4. This time is spread across a variety of tasks such as fraud detection pre-reimbursement (3.9 hours) and solving compliance issues due to fraudulent submissions during audits (4.0 hours). One of the main reasons that this is taking so long is because many businesses are relying on outdated processes, with more than a third (39%) deploying manual employee spot checks to prevent fraud – higher than the EMEA average of 33%. It seems that a surprising number of businesses are stuck in the pen-and-paper age when it comes to the expense processes, as almost a quarter (22%) say that their expense process isn’t digitised. The lack of technology also means that they lack the data necessary to assess potential expense fraud.
Artificial intelligence has the potential to help travel and finance decision makers fight against fraud and create smoother compliance processes that make their jobs simpler. The survey found that just 19% currently use AI for internal fraud detection and highlighted that there is a need to invest in AI, as over half believe that AI tools can help to detect fraud and simplify their compliance processes.
Commenting on the findings, Ryan Demaray, SMB EMEA MD at SAP Concur UK, said:
“It is clear from this research that many organisations are struggling to get to grips with expense fraud and losing both time and money as a result. With the pandemic putting a squeeze on the purse strings of many organisations, this is a problem that simply cannot be ignored. It is time for finance teams to put stricter guidelines and rules in place when it comes to expense management as well as investing in technology that will make these guidelines easier for employees to follow.
For small businesses, investing in AI tools could help to ease this burden and automate some of the more labour-intensive tasks, identify patterns and make data-based decisions. This frees up time for SMEs to focus on educating employees on travel and expense policy and the perils of non-compliance. This will enable small businesses to become far more efficient in the area of expense fraud, saving time and money.”