Cash flow is a top priority for business owners, and in today’s competitive market, every nickel and dime needs to be accounted for. Unfortunately, with many businesses, their expense management system allows for cash to still slip through the cracks - in many cases by intentional or unintentional employee theft. What may seem like small amounts adds up over the course of a year. In fact, it is estimated that small businesses in the United States lose up to $50 billion dollars annually from employee misspending.
Many business owners still use traditional risk management methods to try to control expenses. Here are some of the most common and the associated problems for each:
Mandatory Receipts for Corporate Purchases
Although collecting receipts seems like a surefire way to ensure honest spending, it is not foolproof. Receipts can be difficult to keep track of - especially for remote workers. Far too often, receipts can be lost and purchases are not properly validated.
Rules and Guidelines
Even though most businesses have specific rules and guidelines in place to manage employee spending, unfortunately, they cannot entirely control employee theft. Some employees lean towards the mentality that rules are meant to be broken and will not think twice about charging their lunch or daily cups of coffee - which can really add up each month.
Audits are an effective way to find gaps and discover mismanaged spending or employee theft. The problem though is that auditing is a reactive method and by the time inappropriate spending has been identified, the damage has already been done and the funds are generally not recoverable. Many businesses chalk this up to the cost of doing business, however, if they instead used a business prepaid debit card solution with expense management software, purchases could be monitored proactively.
The Emburse Business Prepaid Debit Card Solution
Emburse provides a simple expense management solution that empowers business owners to identify and catch employee theft and unapproved spending before it occurs. Funds need to be approved and then get loaded onto a prepaid card that is authorized for the transaction. Strict controls can be enabled for spend amount, approved vendors, budget groups and are all easily managed via our online platform.
To find out more about how Emburse can help your business better control expenses, contact a member of our team today.