Top 5 indicators for the expense fraud committed by your employees

-- Prevent the unknown expense frauds by knowing them before the time

Employees indulge in expense fraud

A research was done by the Association of Certified Fraud Examiners which showed that the employee expense claim fraud accounts for 15% of all corporate fraud, which is a sizable portion.

The following are some warning signals to look out for if you think your workers are abusing the company's spending management procedures:

1. Workers overspending compared to their peers

Employees in your firm who hold similar or equal jobs should incur comparable costs. Try to determine whether spending patterns and your return on investment are related. Employees who claim to have higher prices at least need to be able to support their assertions and demonstrate how they increase income. Standard standards should outline the accommodations and restaurants that workers of various grades can access while on business.

2. Exaggerating allowable costs

Always ask for a receipt when submitting an expense claim. This is due to the possibility that a dishonest employee would try to exaggerate expenses occasionally slightly (even if not for a considerable amount but a minor one). What if hundreds or even thousands of these high negligible costs were to occur each month? The drain on the company's resources would be considerable.

3. Making claims for non-business products

It is essential to inform managers and employees about what constitutes a legitimate business cost. If a junior employee has a lavish and pricey 10-course meal while working for the firm, it generally won't be seen very favourably. Your business must be extremely picky about the expenditure categories that might be claimed to decrease or eliminate charges of this nature.

Additionally, managers and staff can be educated to achieve this goal. Managers must always accept fair charges. Of course, some occupations, like those in sales and customer service, may need more discretionary expenditure. You should be able to decide what matters most for your business by looking at your ROI. There must be complete comprehension of expense limits.

4. Overcharging

Beware workers who double bill by claiming the same expenditure twice, under two distinct trips, or on two different days. Additionally, some workers may purchase with corporate credit cards and then file a receipt as though it had been bought with cash. Hence, it shows the significance of automated expense reporting systems.

5. Misuse of the corporate card

Employees who incur considerable company costs frequently receive corporate credit cards because they make payment, monitoring, and consolidation easier. A unified view of cards is provided to the HR and Finance departments.

This does have the disadvantage that your staff can wind up spending more than is necessary. You should study the charges when the firm credit card statement is sent to you before you sign a check.

You might also wish to offer prepaid debit cards for staff that travel. Here, you can establish your travel budget well in advance. With this in place, you can put your team on a tight budget from the start, preventing them from overspending.

Fraudulent cost claims and reimbursements may be significantly decreased with effective spending policies. Automating the approval process using cost management software such as TrackEx eliminates errors and makes it simple for staff and management.

TrackEx, a complete travel and expenditure management tool, provides real-time and actionable insights to analyze better. It manages corporate travel expenses, including booking (flight, hotel, and car) and other user management services, accounting, audit, and compliance with well-structured reporting.

With its real-time expense reporting feature, TrackEx reduces reporting time by 80%. Some of the other things to know are-

  • Paperless corporate expense submission, claims, and reimbursement
  • Automate Mileage Tracking For Corporate Travel
  • Corporate card reconciliation

You can contact the business travel management executive at TrackEx