5 Steps of Preventing Expense Fraud

Consider the following expense fraud schemes; air ticket fare for a cancelled flight, payment for unsupplied tenders. Shocker! Right?

While it’s easy to imagine a few pounds here and there won’t hurt, expense fraud is a continuum and hard to detect. A recent survey by the National Fraud Authority estimates that companies lose over £100m due to subsistence fraud. In victim companies, colossal fraud comprises the executive management tier.

Common examples of falsified and inflated expenses include:

  • Overstating miles travelled
  • Claiming personal expenses as business expenses
  • Falsification of receipts to receive more
  • Forging managers’ signatures
  • Splitting bills with colleagues then, both claiming reimbursements.

Without clear company guidelines and records, employees tend to cross the line. Below, we discuss the respective remedies to fraudulent expenses in your business.

  1. Define Expense Report Policies

As compared to large organisations, smaller companies have much simpler policies. For both, they may include:

  • Expense submission 30 to 60 days from the day incurred
  • Receipts for all purchases over £30
  • Itemisation of all multi-category purchases.
  1. Inform of Policy Violations before Submission of Expense Reports

Sadly, most employees don’t refer to the handbook when preparing their reports. Ernest & Co Accountants can help you install expense report systems that automatically highlight policy violations like duplicate transactions and omissions hence improving policy compliance.

  1. Thorough Expense Review and Approval Process

Appropriate managers should ensure accurate expense representation, for instance, project-specific or multiple managers approvers according to the amount of report required.

  1. Utilise Data Analytics

Scales, graphs and charts are essential when monitoring company expense trends as they can be used to flag and investigate anomalies.

  1. It all comes down to the Tone at the Top!

The creation of a quality control business environment is the responsibility of management. Management ought to participate in the review process and also exercise the same set standards.

Clear and thorough expense guidelines with ethical leadership will utterly keep your company’s revenue and reputation on course.


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