It is easy for senior management to misuse the company’s funds. Moreover, there would sometimes be less stringent verification of their reports, which gives them the scope to submit fraudulent expense claims and get away with it. Sometimes, this would result in serious issues and could potentially be a big risk to the reputation of the organization. Hence, your expense management system should equally impose finance controls on all employees including senior executives. Here, we have listed out some best practices that would help you set up financial systems and processes to overcome this barrier.
- Check the approval workflows for senior management including Directors and CEO. Make sure that there is genuine accountability for each approval, so that everything can be recorded in audit.
- Ensure that claims are associated with supporting documentation – at least scanned copies should be retained.
- Double-check mileage expense claims-details of “from”, “to”, and “why.” It is better to have the number of kilometers/miles recorded. Integrate your expense system with GPS if required.
- Have printed “employee accountability” statement at the bottom of the form saying that “I hereby declare that all the expenses claimed in this form are genuine, accurate and are for business purposes only”.
- Have someone review reimbursements made to the senior managers to check for any deviations such as late submission, delayed approvals, and claims of greater amount than anticipated. Just check with your seniors what additional support they can provide, in case it is required to be audited in future.
Above said are some of the best practices you can implement to avoid the expense fraud pose by senior management. Using a robust expense report software solution will also aid you greatly in this regard.