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The Most Common Expenses Scams (And How To Stop Them)

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Editor Coda
Aug 27, 2019

Most employees are fundamentally honest people. Few are willing to jeopardize their career over a false expense claim.

But research by Chrome River suggests there is a small group (5%) who will submit receipts for illegitimate spending. In organizations that still use spreadsheets and paper receipts, finding fraudulent claims can be almost impossible.

The detective work involved in manual processing of reports is, of course, also time-consuming — time that could be put to better use elsewhere. (And your finance team will probably thank you for it, too.)

Here is a selection of the most common ways employees try to commit expense fraud and what to do:

Mileage mischief: Few expense approvers bother to check that a personal vehicle mileage submission is correct. An extra 58 cents per mile might not seem like a lot but can easily add up to hundreds of dollars for staff who spend a lot of time on the road.

How to stop it: Integrating Google Maps into an expense automation system where employees enter their start and finish addresses makes it difficult to pad out a mileage claim.

Duplicate receipts: An employee submits a receipt for a meal. Then, say two months later, they claim they forgot to “submit it on time” so resubmit the same receipt. After all, who’s going to spot it?

How to stop it: It’s not fair to reply on eagle-eyed and elephant-memoried finance staff to spot duplicates. Instead, an automated solution will detect if a receipt has already been submitted and flag it. If the defrauding diner persists in trying to submit their claim, the system will simply block the user from doing so.

Threshold tricks: Many organizations don’t insist on receipts for purchases under a certain threshold, usually $25 or $50. Dishonest employees might try to exploit this loophole by submitting receiptless expenses for just under the limit, stating they’ve lost the receipt.

How to stop it: Leading automated expense automation systems have sophisticated analytics capabilities built into them, meaning finance teams can drill down into expense items and easily spot patterns and anomalies in visual dashboards. Finance staff can use these to identify trends such as receiptless expense submissions and then investigate these with the individuals.

To see more of the most common ways that staff try to commit expense fraud, and how they can be easily stopped, download this report.

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