5 Different Ways To Spot Fraud In The Expense Reports Of Your Employees

January 26, 2016 3:36 pm0 commentsViews: 164

By : Melissa Patterson

expense_report_1Management of expense reports is one major task in any business that sends employees to represent the company with clients, other offices and trade conferences. Though most of the employees are trusted and obey the corporate rules, there are a few dishonest ones who make a serious dent in the bottom line. This does not have to be in the same way it is. Having the proper knowledge, business planning and company policy could help in curtailing the fraud. Listed below are five major ideas and strategies that would help you spot out fraud in the expense management reports of your business organization.

Provide a proper training to the entire staff of your organization: Everyone who is responsible for the reimbursement process needs to be educated about how to spot the questionable items, and how they could enquire with the employees about them.

Import the expenses straight from the employee’s credit card: One of the best ways of fighting against fraud is to have tampered proof documentation. In short, if the employee is ever in a position to manage and manually enter the expense reports, then the risk of mistake is just too high. Set a rule to mandate that purchases be done electronically and then import those electronic purchases directly into the expense_report_2bank or the expense management system.  Getting tamperproof records straight from the required source is not just faster but is also the most convenient process to monitor all the employees who do purchases with their credit cards.

Detect falsified claims: This can either be that the expense management report that has been submitted to you is given with false documents or with stolen falsified blank receipts. The attached fake receipts could have been just left-out receipts taken (or stolen) from vendor counters, hotels or restaurants; thus, they have inflated and falsified amounts. The receipts may also be taken from friends or family members just to be able to claim the expense reports.

Require receipts for all the expenses made: Fraud in expense management reports are easy expense_report_3enough to do when organizations do not require any sort of receipts. So whether it is cash expenditure or an unsubstantiated corporate credit card expense, it is important to have documentation on hand which will help you check what, where, and why a specific expense was made. Organizations have different approaches when it comes to requiring receipts based on the specific needs and requirements. Some would require receipts for each and every expense that is made while others would require documentation for the expense made above the threshold. Online expense management makes it easy for each and every employee to scan and submit their receipts for the expenses made. This also allows the accounting team to maintain a detailed documentation and minimize paper management.

Utilize the online expense management technology: Making use of the online expense management technology is considered to be one of the easiest ways to identify common expense management reporting issues and prevent them with methods related to employee fraud. One example is setting an amount and time limit for claiming and liquidating expenses while another is asking for duplicate receipts on all expenses made.

Most of the cases of expense management fraud are intentional but there are those which are generally the result of ignorance and confusion on what is allowed or not. Having a clear expense policy in your organization and communicating it among each and every one of your employees is the most effective method. 


Melissa Patterson is a freelancer and has experience of over 5 years in expense management and reporting software. She has in-depth knowledge about managing travel and different types of expenses incurred in business. She writes about expense tracking software as a freelancer.


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