New research from SAS has revealed more than 37% of EMEA businesses suffer from travel and expenses fraud.
Procurement fraud occurs when employees and suppliers behave fraudulently during the contract bidding process or over the course of the contract.
This can range from employees colluding with their preferred vendor to give unfair advantage during procurement, to suppliers submitting multiple invoices for a single item or service.
While procurement fraud is a serious crime that in many countries carries a jail sentence, perpetrators are often willing to take the risk for personal revenge or financial gain.
Financial losses caused by fraud and processing errors are no longer hypothetical numbers. SAS research reveals that over a quarter of EMEA companies lose approximately between AED 40,000 and 600,000 every year.
A total of 18% reported up to about AED 40 000 losses annually and almost 12% reported between approximately AED 600,000 and 1,650,000 losses annually. Over AED 1,650,000 losses have been detected by 3.7% respondents.
“These figures only reflect the tip of the iceberg,” said Celal Kavuklu, Head of Business Solutions, SAS Middle East. “Procurement fraud is rapidly increasing and is notoriously difficult to detect and measure. This is due to a lack of awareness and preparedness, as well as its bugbear status, among businesses. As a result, the magnitude of the challenge is most certainly underestimated.”