Easily Identify Fraudulent Transactions With Expense Management Software
As a small business owner, you constantly have to keep a pulse on “the numbers.” You know exactly how much you pay your employees, you know how much vacation time they have, and you know how many hours they work. But did you realize that most small businesses have a wealth of information in their invoices and expenses that they’re not even capturing?
It’s hard to say you have a good pulse on your company if you don’t know what you should be looking for within your expenses. Simply put, you can’t manage what you can’t measure. If there’s no data, there’s no management, and if there’s no management, there are no insights.
Automating your expense management technology helps you get that hidden data—data that you most likely would not see otherwise. This data helps your business run more efficiently both now and in the long-run. It can also save you a ton of time, so you can focus your attention on growing your business.
Here are a few ways automated expense management technology helps you and your business uncover your hidden data?
Alert you to potentially fraudulent activity
First and foremost, expense management technology acts as a security camera, so to speak. We all know cameras around restaurants and other business preventative impact on fraud. Automated expense management technology works the same way; the key here is visibility.
For example, you know that one of your employees took a client out for dinner. You collect the receipt and see how much the entire bill costs. Ah, $150—a bit expensive, but you have the receipt. The expense can be entered and you can move on with your day.
All good, right? Not exactly—and line-item data available from automated expense management technology tells you a different story entirely.
This data shows that three people, not two, were at dinner and used the company credit card. You find out it was the employee’s significant other—someone who has no affiliation with your company. Ultimately, this kind of data shows you exactly what was bought and for how much, tipping you off to something happening that was against company policy.
Visibility is imperative for a small business owner to know exactly how money is being spent, and automated expense technology is a simple way to get you there.
Allow you to compare and control costs
Another insight this business technology uncovers is cost comparisons. This is useful when, for instance, you see that eight contractors went to Lowe’s and Home Depot to shop for PVC pipes. The detailed line-item data not only shows you how much each piece of equipment costs at each store, but it also shows you how the cost compares across these stores. It’s not uncommon for a business owner to realize “wow, Home Depot is costing us $3 more per foot compared to Lowe’s” after viewing the line-item data on receipts.
Now that is powerful. Here, we are moving away from simply “tracking cost” to actually analyzing and using the data. Automated expense management technology makes it undeniably easy to do just that.
Remember, you can’t easily see these kinds of cost comparisons and trends from looking at your bank statement, and an expense management tool provides a simple way to do just that.
Show you what you’ve bought and from who
A core question a small business owner typically asks is, “Where is my money being spent, and how do I track get real data from it?” It may seem like a simple question, but the process to get a basic set of answers is incredibly manual and over-complicated.
For example, documents from your bank are essentially useless to answer anything more than a basic question. If you ask them how much money you spent with “vendor x” last month, they will have to dig through bank statements and manually add up all of the transactions for you, and if you’re asking your bank to do that, it’s probably going to involve a fee.
With expense management technology, all you have to do is forward the digital copy or image of your invoice or receipt to a system. From there, you’ll get a highly accurate digital record of all kinds of important data: invoice number, vendor, balance due, and payment terms. For receipts, you’ll see things like the merchant name, merchant category, grand total, and more.
This data may seem basic, but it can be easy to lose track of, particularly when there are so many paper receipts floating around everywhere. Before you know it, one or more of those pieces of paper have been lost or misfiled. An expense management technology system will save you countless headaches by safely and accurately storing this data.
Bring data into one aggregated view
You might feel like you, as a business owner, have all the data you need to process invoices and receipts. But what good is the data if it’s not properly organized?
Imagine this scenario. You use both a Bank of America credit card and a Chase debit card for your business. You would like to know how you’re spending money in certain areas across both banks. Expense management technology can do this for you by combining all of this data into one view. It essentially becomes your “total wallet.”
And, it can even help if you have multiple accounts at the same bank. It can pull in those different accounts to show you just how you are spending your money—all without having to pull and merge data from multiple places.
A bank may not provide any cash flow or expense management support to small businesses, but this is where you have the power to use smart business technology to take matters into your own hands. You’re in the driver’s seat.
Uncover fake data on receipts and invoices
In today’s technologically advanced world, it’s easier than ever for bad actors to create realistic fake documents, making it more difficult for businesses to spot them. Even the most detail-oriented auditor can and will overlook a forged document due to the quality of the forgery.
There is just too much data for humans to analyze. Expense management technology can simplify your business and ultimately your life by identifying these types of fraudulent schemes. You may have spent $30 at a merchant, for example, but how do you know you received a legitimate receipt? Does the merchant logo match the phone number? Does the company address match the URL of the receipt?
This is where artificial intelligence can help. Imagine a tool that analyzes all of these documents by using artificial intelligence to identify potential fraud. For example, an employee submits reimbursement requests for coffee with friends printed from an online receipt generator. But, according to expense management technology, the employee is now above the normal spending threshold for someone at a similar level as him in his department. Once the pattern is identified, an administrator will be notified, and, if needed, corrective action can be taken.
All of this “hidden” data doesn’t have to be hidden—and it starts with reliable, accurate expense management technology. Itemize’s expense management solution is a powerful tool to help identify and eliminate fraud. Try it for free; it’s simple and quick to download and start using.