Expense management processes in many Hong Kong businesses are vulnerable to fraud, non-compliance, human errors and inefficiencies, according to a survey of finance executives and employees in Hong Kong.
The survey was conducted by Concur in partnership with Morar HPI in September 2017 and examined how expenses are processed in businesses with more than 250 employees in Hong Kong. A total of 107 Finance executives and 316 regular employees who file more than four expense claims a year from such businesses were interviewed.
The survey also found that few finance executives have a strategy in place to digitally transform their expense operations.
While mobile workforce is on the rise, some companies are unable to fully support business operations on the road with end to end solutions. The results suggest that Hong Kong companies are potentially impairing their corporate governance, competitiveness and employee satisfaction due to such inadequacies.
Many expense practices are susceptible to exploitation
More than one-third of finance executives said they do not have an automated solution in place to detect red flags on potential fraud, and claimed it is difficult for them to ensure policy compliance.
In addition, more than one-third of regular employees admitted claiming expenses for non-expendable items, again suggesting potential fraud and a lack of compliance.
While 47% of finance executives are worried that their expense procedures are vulnerable to human errors and inaccuracies, more than one-third of regular employees feeling expense procedures involve too much paperwork and are too slow and cumbersome.
“If not addressed properly, fraud and non-compliance can undermine corporate governance, while human errors and inefficiencies can adversely impact productivity,” warned Boonthai Hoh, Managing Director, Greater China, Concur.
Hong Kong lags behind in digital transformation of expense management
The survey results also indicate that Hong Kong firms less than 15% of Hong Kong finance executives are reasonably familiar with the term “digital transformation,” while only 18% have a digital transformation strategy for finance in place.
“The lack of digital transformation for finance arguably explains the problems highlighted earlier, since legacy expense processes are more susceptible to fraud, non-compliance or human error than digital platforms, Hoh said.
The lack of support for approving expenses on mobile
In addition, while more than two-thirds of finance executives claim that their staff can file expenses on mobile, almost half of the managers say there is no facility for approving expenses on mobile.
Given this, it’s vital that businesses keep up with these changes and find ways to ensure their systems can support the way employees work and ensure workforce satisfaction and high productivity, said Concur.