Is your company losing 5% of revenue to expense fraud?
A study by the Association of Certified Fraud Examiners (ACFE) says that organizations typically lose about 5% of annual revenue to fraud, much of it from questionable expense reports.
On a recent episode of The Accounting Podcast, I shared some recent examples from The Wall Street Journal that highlight how creative employees can get: family gifts, vacations, even an RV charged to the company card.
Certain credit card systems make it easier to hide, with charges from adult entertainment venues appearing as “restaurants.”
If your company has a 10% net profit margin, cutting out expense fraud could increase profits by 50%! Sure, you have to spend more on accountants and tech to spot the fraud, but it can't possibly cost more than 5% of revenue.
The money saved could go toward employee bonuses, growth initiatives, or other priorities.
