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.......