One of the top expense management challenges for organizations is enforcing corporate travel policies. Ensuring compliance is especially important (and especially difficult) when it comes to executive spending, as illustrated by a recent article from The Wall Street Journal’s MarketWatch.
The article describes how problematic expense reports led to the CEO’s downfall at Polycom, a company that provides video-conferencing devices and solutions. Andrew Miller had been president and CEO since 2010, but he resigned in July after an audit revealed problems with his expense reports.
And it’s not just Polycom. Enforcing corporate travel policies is one of the top challenges organizations face in expense management, affecting 39 percent of organizations, according to a PayStream Advisors study. At these organizations, managers may find missed savings opportunities due to lack of spending visibility. Lack of enforcement also increases the risk of expense reimbursement fraud and of penalties for noncompliance with regulations.
An expense policy combined with automated expense management software like Chrome River EXPENSE can help organizations resolve these problems and reduce risks. Having an expense policy provides both employees and executives with consistent rules and expectations. Building these rules into an automated system helps ensure compliance. Instead of expecting employees and executives to remember all the rules, companies can integrate them into the expense management software — simplifying the compliance process for everyone.
Expense report software is especially useful when compliance regulations create uncomfortable situations. For example, an automated system can help companies avoid the difficult position of enforcing a policy after an employee has incurred the expense. When an executive submits an expense, policy enforcement comes from the system, not from a co-worker, who may feel intimidated trying to enforce the policy with an executive. De-personalizing the process can enforce compliance while improving employee relationships.
In the case of Polycom, the CEO accepted responsibility for his expense report problems, but the problem affected shareholders when the company’s stock fell 15 percent and eliminated $273 million in market capitalization. It’s a good bet that employee morale took a dip as well. Expense management software protects the interests of everyone, from CEOs to employees to shareholders.
As always, we appreciate your insights. What factors make executive expense reports susceptible to errors and/or fraud? Do you think an automated system would reduce these factors? Let us know by posting in the comments section!
- Business Travel in the iPhone Age: Lessons Learned and Future Strategies
- Chrome River and Lyft Launch Integration for Even Easier Business Rides
- Creating and Enforcing Expense Policies: The Happy Medium for Cost Control and Employee Satisfaction
- Why the Manual Invoice Processing Model Is Broken (And How to Fix It)
- 6 Reasons for Implementing an Expense Management System
We love you guys! Everything is going great.
Wow! This Chrome River is great. Word has spread [in our firm] and people that were not invited to be in the pilot group rollout have asked to be included!