Fraud and abuse are a reality in business and procurement card controls, such as expenditure limits and only from specific suppliers, can help prevent card fraud. However, a procurement card does not always prevent fraud or abuse from happening; rather its strength lies in shedding light on suspicious behaviour and expenditure, says Tshipi Alexander, Head of Issuing Sales and Service at Nedbank Corporate Card in this month’s SmartProcurement.
Greater visibility and regular review and reconciliation of spend on a procurement card guarantee early detection of fraud and abuse.
“However, in reality the detection of fraud will happen after the fact when the money is already spent, but the risk the company is exposed to only amounts to the limit that the cardholder is granted. Therefore, when suspicious spend is detected, the company must take the necessary disciplinary steps to ensure that losses are kept to a minimum,” explains Alexander.
The key to ensuring that the company is not adversely affected by procurement card fraud and abuse is to implement strict procurement card policies and to ensure compliance with this policy by all cardholders. Policies can range from very general guidelines on card use to very specific rules to address all foreseeable situations, depending on the company.
How to ring-fence procurement fraud will be high on the list of issues dealt with by a Panel of Experts at the upcoming P2P Professional Forum on the ‘Business case for Purchasing Cards’, held on 20 November 2013 at the Atlantic Imbizo in Cape Town.
You will hear about the implementation of a very large P-Card Programme at a listed Financial Service’s Organisation with over 700 registered card users countrywide.
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