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6 Signs Your Employees Are Cheating You in Expense Claims

Posted by Thao La on

According to a study conducted by the Association of Certified Fraud Examiners, expense claim fraud takes 24 months to detect, makes up nearly 15 percent of schemes involving the fraudulent disbursement of cash and has a median loss of $26,000.
How about your business? Do you know how to recognize whether your employees are being fraudulent?
Here are 6 signs to look out for:

1.    Some employees are spending (a lot) more than others

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For example, two sales people working in the same role. One spends $ 500; the other spends $1,000 for the same customer trip. Is one inflating their real spend?
Look at spending trends over time and how they correlate with ROI. Why does different employee spend drive different customer revenues?
Define the type of places employees should use for entertainment of clients.

2.    Claiming unrelated business items

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Claiming a massage in a hotel is likely a non-business related item. Your company needs to define what the claimable business items are and what is appropriate.

3.    Inflating acceptable expenses

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For small amounts of expense, still within limits, employees often exaggerate a bit, for example, $5 becomes a $10 taxi fare. It’s still an acceptable taxi fare, but it’s easy to be overlooked.
Where possible, receipts should support every claim. This will help you avoid employee fraud.

4.    Overcharging company credit cards

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Some companies provide corporate credit cards to employees who travel and entertain a lot, so they don’t have to worry about reimbursement. However, there is a risk that employees may spend more than necessary. So, next time check the claims carefully before approving them.
Optionally use a pre-paid debit card with the approved budget amount.

5.    Double billing

Some employees are dishonest and list the same charge twice, under different trips. If not checked carefully, employees claim once under a credit card and then again under a cash claim.
Utilising Expense Management software, claims are well recorded and employees cannot use the same bill a second time.

6.    Exceeding the limits of allowable expenses


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Employees split a large amount two to three items to fit the approved limits. So instead of that, why not set limits for each trip cost, based on the project type and purpose.

When policies are applied well, combined with a well-managed expense management system; you may not have to worry too much about fraud.

Do you see any of these signs in your expense claims? Are you struggling in managing your business expenses? Systems@work is used internationally and trusted by organizations throughout Asia, Europe, and the United States.

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