Reimbursement for Out-of-Pocket Expenses in Your Company, Does the Business Flow Prevent 'Fraud'?

Monday, February 2, 2015
Isn't there any 'Fraud' in the reimbursement flow?

For sure, internal control which involves other sections is important, such as 'Job rotation' or 'strengthen the Auditing system'. However, fundamentally 'to steadily continue improving own operations on a daily basis' is the only thing that would raise the existence value of own.

In this article, I would like to consider how to lower the risk occurrence by the workers themselves.

First of all, 'activities to lower the risk occurrence' begins with 'activity of assuming the risks'. Let's make a list of 'Fraud' that could occur in reimbursement.

[Create] Insertion of Incorrect Data
  • Creating fictitious receipts in the computer!
  • Asking for making fake receipts to a familiar store!
  • Resale or return and refund, after actually paid out-of-pocket!!

[Update] Overwriting with Incorrect Data
  • Modifying the handwritten Price part of the receipt!
  • Miscalculation in summing plural receipts!
  • Entering larger amount than the price on the receipt into application data!!

[Delete] Deletion of Correct Data
  • Forgetting to make a request!
  • Missing the receipts in Accounting!
  • Boss covering-up his man's request deliberately!!

In fact, as you can feel it if you tried in "familiar workflow" such as Reimbursement Request practically, "assumption of risks" itself is not so difficult. For the people who are involved in the Business flow on the daily basis, it will be easy to list five ten risks.

Whereas, the bar will be raised when it comes to ""Controlling the Risks". (Basically, there is no choice but to diligently learning in the designing examples of Business process.)

The following Workflow is plotted Risk reduction by mutual restraint. The first major ingenuity is 'Requesting on the occurrence'. It will be checked while the memories of persons concerned are new because reimbursement requests are to be made on occurrence of payment made on behalf each time, rather than batch request at the end of the month. Another ingenuity is 'Scan & Save'. It will allow more people who concern to check concurrently, because the digital images of receipts which are paper evidence have been attached.

[Reimbursement Request for Out-of-pocket Expense]

[Reimbursement Request for Out-of-pocket Expense: '1. Request Out-of-pocket Expense' screen]

What is interesting is that 'Data at Requested' and 'Data at the final confirmation' are transmitted in Email.

Of course, there is the disadvantage that emails will be increased. However, the mechanism of auto-sending Business data which flowing in Workflow, also can be said backup of data at that moment. In addition, there is an advantage for the people who perform the checking, that can execute during on the move.

Moreover, it is unique that the 'both of' the requester and the clerk are capable of 'Scan & Save'.

Although I introduced about 'Scan & Save' in the article on the latest and the one before that, the operator of the scanning were predetermined in these blog posts. Whereas, in the Workflow this time, though the requester must do the data entry by her/himself, but he/she can ask the clerk for 'Scan & Save' as well as doing it by her/himself. Differences in work areas and departments may be said to have been absorbed.

- 'Scan & Save' by Clerk (The last)
- 'Scan & Save' by the Requester (The one before last)

So far, mankind has been spending the huge administrative costs for "check" and "storage" of paper receipts. Nevertheless, it cannot be said they had been managed sufficiently. I guess some of you might have heard someone saying 'Retouching the handwritten receipts is a piece of cake!'. As actual issues, news of "Accounting Fraud" is unending, regardless of public or private.

When you embark on 'Operational efficiency improvement' utilizing IT system (Workflow system), you should also promote "transparency measures" to reduce probability of mistakes and fraud occurrence.

[Data Items List]

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