finance articles businesses business management business marketing Technologies finance accounting Industrial Manufacturing starting a small business Investment health information

Looking at expense reports, what to watch out for


Expense reports are just part of business life for many people. Common business write-offs include taxi fare, business lunches or meetings, hotels, travel expenses, and any other expenses incurred for job purposes.

However, nowadays expense report padding is something all businesses need to be on the lookout for. This occurs when employees fudge the numbers on their reports in order to be reimbursed for more money. Expense report fraud is also on the rise, and makes up 12% of all corporate fraud cases.


Expense report fraud is more than just an extra lunch or two tacked on. The average expense report scheme cost companies $60,000.

Knowing this, it is important for business managers to be on the lookout for expense report fraud. The following are some tips that will help you know what to watch out for when looking at expense reports.

Know what the common schemes are.
The most common expense report padding involves airline tickets. Typically, an employee will buy a full-price, fully refundable airline ticket. At the same time, he or she will purchase a discount ticket as well. He or she then returns the more expensive ticket and gets a full refund while using the cheaper ticket for the business trip. He then submits the receipt for the more expensive ticket and keeps the difference.

Double billing for expense reports is also common. For example, an employee has two receipts for a dinner and submits the duplicate a month or so after the original was submitted, banking on the fact that the employer won't notice he or she dined at the same restaurant for the exact same amount the month before.

Expensing personal expenses as business ones is also fairly common. This can include smaller things like meals or transportation fare, but can be more expensive, like vacations that are written off and expensed as business reports.

How to catch them
In addition to knowing some of the more common expense report schemes, there are a number of ways you can look out for expense report fraud. Some ways include:

- Expense report software. There are a number of good expense report software programs and services that can spot suspicious patterns, such as dining regularly at the same restaurant, identical bills, and so forth. Some of these programs can be costly, but they are well worth it.
- Regular audits. Your employees will be less likely to fabricate their expense reports if they can count on regular audits. Some companies even go back and audit old expense reports, requiring those who have questionable purchases to reimburse the company for the expenses.
- Look for the obvious. For example, expensing an $80 lunch for two people at an inexpensive restaurant or purchases made at gift shops, then trying to expense them as business expenses. It is important for managers to go over accounts and question anything that looks suspicious.
- Have employees use company credit cards. Using company credit cards makes it more difficult to expense personal items, as employers can look at the statements sent by the credit card companies for any suspicious charges.

Expense report fraud is on the rise, and it can end up costing companies thousands a year; in fact, the average employee can easily expense an extra $5,000-10,000 a year of personal expenses with little effort. The above tips will help you to know what to look out for.

FREE: Get More Leads!
How To Get More LeadsSubscribe to our free newsletter and get our "How To Get More Leads" course free via email. Just enter your first name and email address below to subscribe.
First Name *
Email *


Get More Business Info
Sponsored Links
Recent Articles

Categories

Copyright 2003-2020 by BusinessKnowledgeSource.com - All Rights Reserved
Privacy Policy, Terms of Use