Automation & Fraud Protection – TweetChat with Tallie

This month we were delighted to have Tallie as our guest on #PEXCardChat, a monthly conversation to help small business owners run better companies. February’s TweetChat focused on helping business owners with their expenses, cash flow and financial management– with a focus on automation and fraud protection. Tallie, the award-winning expense report software for businesses, is a mobile, automated, integrated expense report solution for business owners. For more on PEX Card's partnership with Tallie, click here.

PEX Card: What should business owners expect from the world of expense management software today?

Tallie: Automation, the Cloud, deep integration & strong internal controls are required to successfully do more work in less time. Automation eliminates tedious bookkeeping tasks. Accountants can take on more clients & offer them new value-added benefits. Additionally, business owners should choose software that sends data and documentation to their ERP, automatically syncing updates.

PEX Card: Fraud is a big area of concern for businesses today. What are some examples of fraud in expense management?

Tallie: Expense fraud happens at every level in companies of all sizes. All are more easily prevented than dealt with after the fact. Employees may take advantage of loose controls & expense personal items. They may double-dip & claim the same item twice. Traditional corporate cards invite the most fraud. There's always a risk employees will spend more than necessary. Some small businesses feel they don't have a choice with time-sensitive projects. You can’t just rely on out-of-pocket costs.

PEX Card: Do you have statistics to share with small business owners regarding fraud in expense management?

Tallie: Sure. A 2012 study found that occupational fraud is estimated to cost organizations as much as 5% of revenue per year. That equates to a $3.5 trillion global loss, with upper management accounting for 27% of expense-reimbursement fraud cases. As we stated earlier, expense fraud can be found at every level of a business. Management needs to set the tone at the very top. As a whole, expense reimbursement fraud accounts for 15% of business fraud, and can take 24 months to detect.

PEX Card: Are some businesses more likely to get hit with fraud than other companies?

Tallie: Fraud can be anywhere in business. Companies with very high employee trust & lax internal controls run the highest risk. With the right system in place, such as an automated audit process, fraud can be greatly reduced in a business.

PEX Card: What practices can small business owners employ to prevent fraud?

Tallie: It is critical for business owners to have strong internal controls. Fraud policies must be explicit and well-defined. Our software automatically checks expenses against your specific policies, and flags all expenses in violation. Informing employees of policy violations before they submit their expense reports improves compliance & removes the burden from accountants. For per diem expenses, be sure to require receipts. We've outlined the risks/benefits here:

PEX Card: Manually managing a small business takes a lot of time. Is there technology today that can help owners better manage their companies?

Tallie: There are small business services such as @ThinkHRHotline that offer cloud-based HR solutions with excellent support and lots of resources. Accountants love time-saving solutions such as @QuickBooks Online Accountant, @billcom, @SmartVault, and @avalara. For marketing automation & analytics, business owners should look at @HubSpot, @SEOmoz, @googleanalytics & @Optimizely. When possible, find cloud solutions that integrate with each. This will help businesses run more efficiently with less data entry.

PEX Card: What are some of the challenges as well as benefits of automating a small business?

Tallie: There will always be those who push back against change, but, sooner or later, change becomes necessary for survival. Automating your finances means less busy-work, less money spent correcting errors, more security, and more efficiency. The learning curve does take time, but a business will save far more time with automation than they lose in implementing change.

PEX Card: How can business owners create a culture that supports automation?

Tallie: Every job has tedious, unnecessary aspects. Technology should make jobs easier, so businesses can focus on aspects that matter. Ask employees about their pain points. What busy-work bogs them down? Give them what they need to perform and feel better. Most people cannot imagine working without computers or the Internet. After automation, your business will not look back.

PEX Card: Any final thoughts or suggestions for business owners following our chat today on fraud prevention or automation?

Tallie: Find solutions that combine ease & security. We chose @PEXCard because it makes project funding simple while removing risk. We’ve written extensively about fraud and the best practices for preventing it on our blog: . Automation & cloud accounting are the future. Accountants must decide now whether they want to lead or fall behind.

PEX Card: Thanks again to Tallie for being our guest today. Great tips for business owners! Follow them on Twitter for more advice.

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