Travel and other work-based expenses are a part of the corporate wheel. Whether it’s regular overnight accommodation, train fares, petrol costs or client entertainment, the price of just doing what you do mounts up. If you have a large workforce who are often on-the-road or travelling for work purposes, that can add up to thousands of pounds on a monthly basis.

Some organisations outsource the full T&E process to 3rd parties, others rely upon handwritten expense forms with invoices stapled to the back - most are somewhere in-between. Whichever method is applied, there are points of manual intervention – data entry, checking and approval. And with these manual interventions comes mistakes and the opportunity for fraud.

It is estimated US companies lose $1bn per annum to T&E fraud

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Thankfully, this fraud is carried-out by relatively few employees – over 80% of the value is made by just 5% of employees involved in the process, although this can happen at a number of levels; the employee themselves when they enter information on a form or system, or during the manual calculation process; those responsible for interpreting the data and approving expense claims for payment; staff processing reimbursement payments. There is also the possibility of collusion and systematic fraud to think about.

There are some practical tips you can follow to help control employee T&E risks and costs, including;

  1. Have a clear T&E policy and well-written guidelines for employees
  2. Ensure the people who submit, approve and reimburse expenses are all separate
  3. Analyse claims for some of the frequent issues;
    • 0.25% of expense claims are duplicates – appearing on separate expense reports
    • Up to 6.3% of expense claims are outside company policy
    • Misclassified expenses – ‘miscellaneous’ is the 5th largest T&E spend category
    • Altered and fraudulent receipts
    • Weekend and holiday purchases
    • Lodging and meal outliers
    • Patterns of expenses under the receipt limit.

With over 75% of employees committing expense reimbursement fraud also committing at least one other form of occupational fraud – getting your T&E house in-order is a great step to managing overall employee fraud.
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