Abstract

The largest controllable cost after payroll, at most firms, is employee-initiated spending, but most businesses exercise only the most rudimentary controls over travel and entertainment (T&E) and other employee expenses. While most companies talk about restricting employee expenses, the numbers show that those costs often tend to rise even while overall revenue drops, mostly because of the lack of comprehensive, rational controls.The risks don’t end with the loss of money, either. The Sarbanes-Oxley act, which arose partly in response to stories about employee expense abuses, imposes draconian criminal penalties on companies that lack effective internal controls over expenses. Nevertheless, rising employee expenses show that most companies remain at risk because they lack those very controls.This paper describes how modern automated expense management applications can deliver comprehensive controls quickly and economically to cut costs and reduce risk of exposure to Sarbanes Oxley violations.