Detecting and preventing
expense fraud in Corporate
Expense reimbursement fraud is
a false claim made by an employee on name of business-related purchasing or visits.
It is the easiest way for an employee to steal from the company with their
reimbursement report. Expense reimbursement is a process that pays backs an
employee what he or she spent for business-related purchasing or tour. When an
employee claims for an illegitimate bill, it comes under expense reimbursement
fraud.
Expense reimbursement fraud and problem
Expense reimbursement fraud is
a common problem of companies but it is preventable. Claiming reimbursement for
personal meal, puffed hotel bill, inflating the cost of taxi ride and other
fake bills by an employee should not underestimate by finance department as it
cost huge to the company. Research shows that a percentage of employees admit
submitting false and inflated bills for further expense reimbursement. Anytime that
an employee claims for reimbursement of an expense that is personal and not
business related, is a type of fraud. If anyone of your employee is committing
such type of fraud, he or she is often more likely to provoke others.
Maintaining records of such
bills and reimbursement is also a big challenge for the team concerned. In most
of companies audit team are overburdened with number of expense reports to
audit them. Being capable to audit large number of documents most of them review
only small portion of documents.
Before taking a look at how to
prevent expense fraud, it is important to understand the common ways these
incorrect claims can occur.
·
Over claiming for restaurant
tips, presenting receipts for unused items or trips.
·
Claiming personal meal as
business dinner or expensive hotel cost for a business trip.
·
Sometimes employee claim reimbursement
for cancelled airline tickets and office supplies they did not purchase.
·
Personal cab or auto bill from
employees who actually travelled in sharing.
·
Repeated claims for single use
of any service or product.
Such fraudsters are sometime habitual cheaters and they keep blank
receipts of cab, hotels, restaurants, etc for further claims.
How to protect your company
from frauds?
Safeguarding your company from false expense reimbursement is not so
challenging while one can start this by maintaining strong internal controls.
There are several ways to verify the bills claimed by employees.
·
Mandate submission of original
bills with receipt number, item batch number, releasing date, etc.
·
Verify fake, photo copied,
morphed bills at least for two times.
·
Maintain a strict travel
reimbursement policy and guidelines, question expenditures that look fishy.
·
Avoid advance cash payment to
the employee and make all payments in a formal manner through either account
payable.
·
Interrupt fraudster found to
be falsifying the expense bills. If he or she is allowed to scot-free, other
employees will surely follow their actions.
Frauds foster when organisation has no culture of
auditing expense reports properly. Sometimes, when company does not charge
penalty or punish the fraudster, it motivates other employees to follow the
same pattern of fake bill reimbursement. While human interference can help to
discourage fraudster in such claims, Integrated Travel and Expense Management Solution like
ABC can help you to keep frauds at bay.
Why ABC ?
We understand the rising financial burden of corporate
owing to this fake expense bills. Our software eliminate expense fraud, detect
duplicate bills, highlights suspected claims by running pre-submission checks.
This is an automated process that eliminates the requirement of checking each
claim manually. It helps to save your time and set up compliance with your
corporate policy. The software validates reimbursement claims in real time and
rejects the claims that are out of company’s policy. Qualitative expense
management software automatically reduces company’s expenses and save it from
possible fraud.
·
Verify each
claim automatically: Expense
Management Solution verifies each claim within seconds.
·
Eliminates
suspected claims: Expense
Management Solution easily identify duplicate, suspicious transactions, group
meals or individual meals and highlight the problems in easier way.
·
Auto scanning of
repeated claims: This software is
capable of scanning repeated claims for single use of service or product. It can scan wide range of transactions within and outside of HR.
·
Simplify
administration: It is important
for managers and finance team to control expenditure as much as possible
specially the fake bill. This software helps to simplify the process of
verifying number of bills in easier way and reduce administrative efforts.
·
A
comprehensive detection system: Apart from
detecting suspected bills and scanning each claim, this includes proper
analysis, data mining, eliminating the doubts, exception reporting and
highlight anomalies.
Do you plan for Integrated Software to manage travel claims of
employees? We would love to hear you on.......
