The expenses fraud myth

The fact is that the vast majority of people are not trying to defraud their employers by claiming fake or inappropriate expenses. People are generally honest. However, when it comes to expenses, some managers still worry that expenses claims are seen as a ‘perk’ and that they should be pushed back wherever possible.

Some businesses are now seeing that this view is outdated and doesn’t sit well alongside modern business styles and cultures. When HR teams and leaders are investing so much in valuing staff, being mindful of their wellbeing, and promoting employee engagement – it doesn’t sit well if individual managers treat every expense form as something potentially suspicious and a chance to catch people out.

Most businesses have moved forwards in their thinking and attitudes through a combination of change in mindset and better expenses policies, processes and systems.

Preventing expenses fraud

What in the past may have been viewed as a possible fraudulent claim could in fact be a genuine mistake. Complicated expenses policies with a multitude of rules, limits and small print are very easy to misinterpret – so the first step is to bring your expenses policy up to date. Simple, clear language, practical examples, and FAQs are all good ways to help staff get it right rather than inadvertently get it wrong.

How fair is your expense policy?

Do you have reasonable limits and rules that reflect current rates for accommodation, food, travel etc. or have the same amounts been in place for years? If a member of staff isn’t fully reimbursed under the current policy for the amount of their own money they have genuinely spent whilst on company business, is this fair? Attempting to claim the full amount isn’t fraud – it’s a response to an out-of-date policy.

Tackling incorrect mileage expense claims

Business miles is one area where problems have frequently occurred when an employee overclaims the miles travelled. But again, this can be a result of poor record keeping rather than any thought-through attempt to take advantage. Having a ‘black box’ telematics system fitted to company vehicles is the most effective way to remove the headache altogether as there is no question about the miles travelled, the only clarification needed is on personal journeys.

Reasons why the 'expense fraudster' tries to cheat the system

Of course, occasionally, there is the odd individual who attempts to ‘play the system’ and make claims for expenses payments they are not entitled to. They may look to cheat the system for a number of reasons, such as:

• Remuneration - some may be unhappy with their salary and help themselves to compensation through expense fraud.

• Reimbursement – some may be unhappy with slow payment of expense claims. They may pad their expense account to generate some ‘interest’ especially if they're paying off personal credit charges

• Opportunity - Either through pressures like struggling to make ends meet, or simply opportunism to make some extra money dishonestly, they may commit expense fraud simply because the opportunity to do so is there.

Using expense software

But with the advent of automated expenses software, scanned receipts, mileage tracking and built-in spending limits – the grey area where they used to thrive and the opportunity to commit expense fraud is no longer there.

Thankfully expense management has moved on – which is great news for the vast majority of us who simply want to get on with our jobs. The way forward? Put a transparent, up to date expense policy in place, and back it up with a simple technology solution.

Need a hand writing or reviewing your expense policy? Visit our Expense Policy Toolkit today!