Median Loss for Small Businesses Exposed to Fraudulent Activity is $150,000
Many small businesses (SMB’s) struggle to effectively implement structural changes to their operations that result in actual reductions to costs. Cost reduction strategies often require changes to the way employees spend on behalf of the company, which in turn can expose the business to a greater risk of employee fraud. Unlike their larger counterparts, SMBs often lack the appropriate tools to adequately monitor and control employee spend. Thus, the SMB is often most vulnerable to fraudulent activity.
According to the ACFE’s 2016 Report to the Nations, the estimated median loss for a small business (less than 100 employees) exposed to fraudulent activity was $150,000. The report highlighted that 31.8 percent of small businesses fell victim to fraud – the highest of any business size category. For comparison, organisations with 100 to 999 employees had a fraud incident frequency of 19.5 percent; those with 1000 to 9999 employees were rated at 28.1 percent; and larger businesses at 20.6 percent. Clearly, SMBs need to give particular consideration to the issue of fraud.
Within SMBs there are several common issues that complicate the expense management process and leave the organisation vulnerable to fraud. SMBs tend to use manual expense management processes which inevitably hamper management oversight of employee spend. The most obvious problem is a lack of visibility – receipts often lack detail, supporting documents get lost, and manual reconciliation processes often require simplification or short-cuts that obscure fine grain detail. Manual processing of receipts imposes time delays between payment and reconciliation which can further hamper oversight and add unwanted costs. Importantly, manual reconciliation processes are largely reactive – they don’t allow any real-time control or oversight of employee spend. The implications, in terms of combating fraud, are obvious and significant.
So, what can be done to mitigate the threat of fraud, and facilitate the prosperous growth of SMBs without adding complexity and cost to their operations?
Implementing an efficient expense management solution assists SMB’s to automate reconciliation processes, monitor employee spend, and apply control measures that will reduce their exposure to fraud.
Penny Inc’s expense management platform delivers automation, while seamlessly incorporating measures to mitigate the risk of fraud, providing businesses with the ultimate way to pay for and control business related expenses.
Penny Inc makes it easy to:
Eliminate credit risk by providing employees or contractors with a reloadable prepaid debit MasterCard. The business owner controls the amount and frequency of funds loaded on the cards.
Increase visibility into employee spend with transactions appearing in real time within the Penny Inc desktop application whenever a card is used.
Improve employee accountability through automated receipt capture and storage at the time of purchase. Employees are prompted, and reminded to photograph the receipt at the time of purchase.
Gain Control of how, and where the card is used through the ability to apply budget limits and merchant restrictions on individual cards.
Enhance Security of your cards and business funds, by using a Virtual Card for single use international or online transactions. Virtual cards are an inclusion of the Penny Inc solution.
Signing up for the Penny Inc expense management solution is easy. Visit www.thepennyinc.com, and click ‘Get Started’. There are no subscription fees, annual fees, or transaction fees. The Penny Inc desktop application, cardholder app and prepaid debit MasterCards are all free. Penny Inc has been created with the purpose of helping Small Businesses reduce the cost of expense management. Get your time back, so you can focus on the important things.
Contact us for a demonstration or for further information:
- David Peterson
- Chief Executive Officer, North America
- M: +1 727 424 7526
- E: firstname.lastname@example.org
Sign Up for Penny Inc today.