Empower Your Small Manufacturing Business: Reduce Expense Fraud using PeopleHCM

Empower Your Small Manufacturing Business: Reduce Expense Fraud Using PeopleHCM 

This blog aims to educate financial managers, CFOs, HR professionals, and expense management teams in the manufacturing sector on the critical need to move away from traditional, manual expense management methods. The blog will focus on how PeopleHCM’s features, such as automated expense reporting, real-time expense tracking, compliance checks, detailed audit trails, and seamless financial integrations, address common fraud challenges and enhance overall expense management efficiency.

January 29, 2025

Category:

Educational/Informative

Expense Management

Managers

Small Business

Small Businesses Owners

The Association of Certified Fraud Examiners’ 2022 Report to the Nations, which analyzed over 2,000 cases worldwide, noted that expense reimbursement frauds lasted for an average of 18 months before detection, making it one of the longest-lasting forms of fraud.

Expense fraud is a growing concern in the manufacturing industry, where accurate financial management is crucial for success. Common issues include falsified expense reports and the misuse of company funds, which can lead to significant financial losses and undermine business operations. For small manufacturing businesses, the impact of such fraudulent activities can be particularly damaging. Therefore, adopting effective expense management solutions that prevent these risks is essential.

Importance of Fraud Prevention

Preventing fraud and ensuring operational efficiency is essential for maintaining financial integrity in the manufacturing industry. Fraudulent activities can lead to significant financial losses and weaken a business' overall stability. Even minor frauds can wreak substantial havoc on small manufacturing businesses, where resources are often limited.

One specific area we cover here is expense fraud – critical for operational efficiency, statutory filings, and regulatory compliance.

Role of HCM Software

Human Capital Management (HCM) software is pivotal in combating expense fraud, mainly when tailored solutions like PeopleHCM are implemented. PeopleHCM offers comprehensive tools to reduce the risk of expense fraud. With features that streamline expense tracking and approval processes,

PeopleHCM ensures accurate record-keeping and enhances accountability across the organization. It helps small manufacturing businesses protect their resources and sustain growth.

Discover PeopleHCM's expense Management to prevent Fraud and streamline operations.

Learn More in Our Blog

Automated Expense Reporting

Reducing Manual Errors

Automated expense reporting through HCM software is essential for reducing human errors and minimizing the risk of fraud in manufacturing companies. Manual entry can lead to mistakes or intentional falsification, but with PeopleHCM’s One-Click Receipt Scanning, these issues are significantly reduced. This feature allows users to photograph their receipts, automatically extracting and populating details into expense reports.

By eliminating manual data entry, PeopleHCM ensures accurate tracking, enhances financial integrity, and reduces the potential for expense fraud

Feature	Manual Expense Reporting	Automated Expense Reporting
Data Entry	Manual data entry, prone to human errors	Automatic data capture from receipts and invoices
Time Consumption	Time-consuming. It requires significant manual effort.	Saves time with streamlined processes and automation
Accuracy	Higher risk of errors and inconsistencies	Improved accuracy with reduced human intervention
Expense Approval	Manual review and approval processes	Automated approval workflows based on predefined rules
Reimbursement Processing	Manual processing and tracking of reimbursements	Faster and more efficient reimbursement processing
Receipt Management	Physical or manual digital filing, easy to lose or misplace	Digital storage and retrieval of receipts
Reporting	Manual report generation, time-consuming	Automated generation of detailed and real-time reports
Integration	Limited integration with other systems	Seamless integration with accounting and financial systems
Audit Trail	Harder to maintain a clear audit trail	Clear and accessible digital audit trail
Cost	Potentially higher due to labor costs and errors	Lower long-term costs due to efficiency and reduced errors
Scalability	Less scalable as volume increases	Scalable to handle increasing volume without additional effort
Accessibility	Limited access to data often requires physical presence	Accessible from anywhere with appropriate permissions

 Real-Time Expense Tracking 

Immediate Fraud Detection 

Real-time expense tracking is crucial for quickly identifying and addressing suspicious activities within an organization.

According to a 2023 Association of Certified Fraud Examiners (ACFE) report, companies that utilize real-time monitoring systems detect fraud 50% faster than those relying on traditional methods.

This rapid detection is essential for preventing minor issues from escalating into significant financial problems, especially in the manufacturing sector, where financial precision is critical. PeopleHCM enhances real-time expense tracking with its 'Credit Card Import' feature, offering several key benefits tailored to the needs of manufacturing businesses:

Automatic Transaction Merging: The 'Credit Card Import' feature automatically merges personal and business card transactions, providing manufacturing companies with a comprehensive view of all expenses in one place. This is particularly useful in manufacturing, where tracking operational and overhead costs is vital for maintaining profitability.

Increased Visibility: By consolidating expense data, manufacturing businesses gain enhanced visibility into their financial activities. This increased visibility is crucial for effectively monitoring and auditing transactions, ensuring that all expenses align with budgetary constraints and operational goals.

Immediate Fraud Detection: Real-time tracking and increased visibility allow for the prompt identification and flagging of suspicious activities. In the manufacturing industry, where margins can be tight, early detection of potential fraud or discrepancies is essential to reducing the risk of significant financial losses and ensuring the integrity of financial processes.

Automated Compliance Checks 

Enforcing Expense Policies 

Automated compliance checks are crucial for manufacturing companies to maintain financial discipline and adhere to strict expense policies. PeopleHCM’s expense management system is designed to address the unique needs of the manufacturing sector by enforcing compliance through advanced features. The system automatically flags expenses that exceed predefined limits or violate specific company policies, such as unauthorized spending categories or over-budget claims. This real-time monitoring ensures that all manufacturing-related expenses comply with established guidelines. It helps to minimize policy breaches and maintain financial control in a high-stakes industry.

Using PeopleHCM, businesses can effectively enforce their expense policies, enhance financial control, and ensure accuracy in their expense management processes. 

Detailed Audit Trails

Comprehensive Tracking

Maintaining clear and detailed audit trails for manufacturing companies is essential for transparency and accuracy in expense management. PeopleHCM’s expense management software simplifies this process with several key features tailored to the manufacturing industry:

Detailed Record-Keeping: Audit trails capture every expense transaction, allowing manufacturing companies to review and track all financial activities thoroughly. They ensure that all expenditures are documented and accounted for, supporting accurate financial reporting and decision-making.
Extensive Tracking: PeopleHCM automatically tracks and validates corporate card statements, monitors unsubmitted expenses, and logs all transactions. It gives manufacturing firms a comprehensive view of their spending, ensuring all expenses are accounted for and aligned with budgetary constraints.
Simplified Investigations: Detailed audit trails make investigating suspicious transactions more manageable. PeopleHCM's system helps manufacturing companies quickly identify and address potential fraud or compliance issues. It safeguards against financial discrepancies and maintains adherence to company policies.

Quick Reimbursement and Multiple Currency Support

Quick Reimbursement: In the fast-paced manufacturing environment, timely reimbursement is essential to keep operations running smoothly. PeopleHCM’s Quick Reimbursement feature significantly speeds up the reimbursement process, which is crucial for manufacturing companies that must manage expenses efficiently. This feature accelerates approvals, reduces wait times, and ensures employees are reimbursed quickly, supporting a more agile manufacturing operation.

Supports Multiple Currencies: Manufacturing companies often operate globally, dealing with suppliers and partners across different regions. PeopleHCM supports multiple currencies, making it easy to manage international expenses accurately. Users can create expense claims in various currencies that are automatically converted to the base location currency. This feature is vital for manufacturing companies with global operations, ensuring clear and precise financial reporting, regardless of where expenses occur.

PeopleHCM's expense management software simplifies global business processes, ensuring smooth financial operations across different regions.

Conclusion

In today's manufacturing landscape, robust expense management isn't just a necessity—it's a strategic advantage. With solutions like PeopleHCM, small and large manufacturers can safeguard their finances, enhance operational efficiency, and confidently drive their business forward. Staying ahead of fraud and ensuring seamless financial processes have never been more accessible.

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