There are many reports and surveys to suggest that expense fraud is on the rise.
Some claim as high as 30 per cent of all staff will exaggerate their expense claims without feeling they are stealing from the company they are working for. If employees continue to do this on a monthly basis, it soon tots up to thousands of pounds a year that companies nationwide fail to save.
With a tough economic climate and pay freezes for most, many employees are tempted to give it a go squeeze in the extra pennies where they can. For businesses that have sparse controls the additions to the monthly payroll will usually go unnoticed.
Companies large and small feel the strain of expense fiddling. In a small company where controls are more relaxed, the payroll operator may not even think about double checking claims from month to month and employees could get away with submitting a claim twice in consecutive pay runs.
In a big corporation it may be easier to go unnoticed as the finance department has limited interaction with the employees submitting the claim. How would they be able to confirm each employees travel mileage for every month if they don’t work in the same office?
Simple steps to prevent fraud
1. A simple step is to provide a robust expense management policy that will clearly set out what can and what cannot be claimed for.
2. Authorisation is key when allowing claims to be paid. Every claim should be authorised by a more senior member of staff and they should understand the requirements of your expenses policy.
3. Be prepared to challenge claims. Don’t feel like you should be embarrassed to question an expense claim. You have been given the position of authoriser to dispute abnormal or inaccurate claims submitted, so don’t just sign it if you are unsure.
4. Employees that are involved in fraud will be less likely to take long holidays away from the office in case someone will spot a problem. It is helpful for all businesses to encourage employees to take a one two-week holiday per year, when they are away from the office for 14 consecutive days, this way any abnormal behavior will be easily revealed.
5. If employees are constantly losing receipts, then make it clear in your expense policy that claims without a receipt will not be refunded. They should then be a lot more careful with storing their receipts to back up their claim.
6. Introduce a random spot check for every member of staff, where you can look at their expenses over the last 6-12 months, this will clearly highlight unusual spending behavior.
7. Use expense management software to automate the checking and authorising process. It will provide you with expense reports for each of your employees and allow you to attach all your receipts in a central storage location.
If you don’t yet have an expense management policy operating in your company, email firstname.lastname@example.org and we can send you a helpful guide to making your own.
If you would like more information on expense fraud, or expense management software call 01270 611 800 and a member of the team will talk through with you your options.