Four ways companies can use technology to reduce GTE risks

November 1, 2016 Christopher Sindik

How closely do employees follow the gifts, travel and entertainment (GTE) policies of a company? It really depends on the individual employees, the culture of ethics at the company, and the perception of policy enforcement. Some people follow the rules because it’s the right thing to do and they would have conducted themselves appropriately regardless of the company’s policies in place. In other instances, employees follow the rules (or the laws) only so that they don’t get fired and/or go to jail. But what happens when there is no policy in place?

A joint survey between the Global Business Travel Association and American Express has found that 17 percent of business travellers have no formal travel policies in place. That is one in six companies with no policy. Having no policy means putting a lot of (too much) faith in employees to do the right thing when nobody is looking. Policies, however, are only good if they are enforced. A policy that nobody reads, cares about or follows is as effective as a policy that was never written. For companies that do have a GTE policy in place, it is a matter of detection, prevention and enforcement. Using technology makes all of these goals easier to accomplish. Here’s how:

  1. Keep track of thousands (millions) of requests. How many GTE expenses get submitted each week? How many people review those expense submissions? If a small team or a single person is responsible for reviewing requests for reimbursement of GTE expenses, things can quickly get out of hand. Work piles up during the busy seasons and this leads to quality control issues where bad expenses slip through the cracks and get approved. Using proper technology can save time, stress and prevent many kinds of human error.
  2. Use smart software that automatically approves or rejects requests. For a company to be at risk, in most instances their funds need to be used in the corrupt or fraudulent payment that is made. Employees are less likely to use their own funds to pay large-scale bribes so if the company does not pay, the risk to the company is avoided. For example, if someone submits a US$5,000 claim for ‘miscellaneous marketing expenses’ paid in cash on a business trip to China to visit a supplier, this should be automatically rejected, flagged and followed up. Similarly, the US$40 lunch with a client should be quickly passed through the approval process. Bonus pro tip: don’t let employees know what amounts are automatically approved or rejected.
  3. Workflow must be built into the GTE tool. GTE software needs to not only catalogue the GTE requests but also have, among other things, the proper notifications, emails, approvals, redirects and escalations that mirror the company’s GTE policies. Without the workflow mechanics to actually process the expenses and requests, the database of GTE expenses quickly becomes a black hole of unseen and unapproved information.
  4. Keeping tally of how much someone has received or given. The G of GTE can often be the most problematic as gifts typically have the strictest set of rules of the three elements of GTE. Consider six different employees that provide the same gift to the same single client during the holidays. Each gift separately would be acceptable but six of the same gift is a violation of the company’s policy as it would be considered lavish. GTE technology should be able to flag and stop this from occurring. Additionally, companies should be able to see if certain employees are spending more on GTE than allowed during a specific period of time.

Any technology is only as good as the people that actually use it. Typically, people will use the system to enter in legitimate expenses that they expect the company to reimburse after a review. Effective GTE software demonstrates to employees that every single transaction will be reviewed, catalogued, documented and ultimately rejected or approved. When using effective and sophisticated GTE expense technology, there is less chance for dubious employees to skirt the system and, ultimately, pay a bribe, commit fraud or otherwise use company resources for illicit purposes.

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