Logistics Companies Leverage Prepaid to Fight Expense Fraud One Transaction at a Time
Is your logistics company losing mileage to expense fraud? Do you need a better way to track and measure your transactions? Keep reading!
By providing “management over the flow of goods and materials between points of origin to end-use destination”, logistics providers will often handle shipping, inventory, warehousing, packaging and security functions for their clients’ shipments. With many employees on the road delivering shipments and travelling long distances, drivers must often be given cash up-front or be reimbursed for their expenses. This can expose a logistics company to employee expense fraud.
No one wants to think that their employees are capable of breaking the law and committing fraud, but it happens, and in today’s world, expense fraud schemes are more commonplace than ever before. While most employees are, in fact, truthful about their expenses–94 percent of survey respondents said they do their expense reports in an honest and forthright manner–the remaining 6 percent represent approximately 1.1 million business travelers in the U.S. alone, accounting for $2.8 billion in losses every year. In the U.K., 14 percent of all fraud is linked to employee expense fraud. The average “fraudster” steals $2,500 annually. At the high end? A whopping $25,000 a year.
Part of the problem is the ease with which expense fraud can be committed. A report in Business Matters found that 84 percent of employees in the U.K. said they have never had any expense claims challenged or denied. Nearly 50 percent of survey respondents said they have increased the number of miles traveled to inflate expense reports. 42 percent of employees acknowledge a lack of adequate checks to identify expense fraud within their companies.
According to a blog post by New York Business Journal, 10 percent or more of a company’s budget is related to employee travel expenses. Having the right processes in place can make all the difference in the world, and save you thousands of dollars in potential losses. One of the best solutions a company can adopt is a prepaid expense program.
Companies, like DHL Express for example, use prepaid expense cards to track and reimburse drivers for their miles and other work-related expenses, such as food or hotels. With prepaid, the company can budget and control the amount that employees can spend, and track their purchases while on the road. The expense cards increase the financial control and planning for the business. They also eliminate any financial hardships that can result when employees have to cover their own expenses, and then await payment.
Because expense receipts can be easy to lose, and are difficult to record and organize, a prepaid solution makes life easier for both employees and account administrators. All payments are tracked and recorded, making it easy to eliminate questionable expense claims. Since the cards have no value until they are loaded, they also help protect the company from loss or theft.
Real-time reporting allows employers to take necessary action in cases of suspicious activities, or if an account is nearing its limit. Detailed account reports also provide employers with a better idea of the budget required for future employee expenses, allowing them to plan accordingly.
Employee expense fraud is a big issue. According to Aberdeen Group, approximately 60 to 70 percent of companies are seeking new ways to manage corporate expenses. Isn’t it time for a more efficient and cost-effective payment solution?
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