SIR – The widespread use of corporate credit cards is exposing companies to unacceptable business risk. Just what controls are in place to monitor purchases, ranging from stationery and IT equipment through to corporate entertainment?

There is something of a naïve reliance on credit card companies to monitor transactions, and this is leaving organisations wide open to employee fraud.

Somehow, in the rush to embrace e-procurement many companies have left behind the first principles of fraud reduction. 80% of fraud is perpetrated by employees. Providing them and, increasingly, third party partners with credit cards and limited controls is ridiculous. Quite frankly, it’s also something of a dereliction of corporate duty. Perhaps if organisations had to publish estimated losses due to fraud in the annual accounts they wouldn’t be so Gung Ho when it comes to handing over corporate credit cards to all and sundry.

Given the recent exposures in the national media concerning credit card fraud, why are companies so blinkered to the risks associated with e-procurement and the allocation of corporate credit cards?

I believe the problems are two-fold. First, most companies are under intense pressure to streamline their operations, reduce their administrative overheads and deliver significant cost savings. Second, the e-procurement software vendors and credit card companies have done a quite brilliant job in citing Return on Investment opportunities, and promoting excellent built-in controls. Unfortunately for them, hype and reality have little in common.

If corporate concerns are to attain the desired e-procurement cost efficiencies they need to impose serious controls over the process, they ought to undertake robust transaction monitoring and close down the employee Cash Point for good.

Alan Livesey Director IDM Data Solutions

Source

SMT