Top Signs of Expense Reimbursement Fraud and How to Stop it from Happening

Top Signs of Expense any company that sends employees on business trips has to have some sort of expense management so travel costs are reimbursed. These companies also have to be concerned with reimbursement fraud, as employees might try and pull a fast one and report an expense that wasn't for business purposes.

According to Washington's State Auditors Office, there are numerous red flags an employee might be committing reimbursement fraud, including:

Expenses are higher than previous years: Unless a company is in its first year, chances are they have sent employees to the same destination multiple times. That being said, when it comes time to add up expenses for those trips, if they are much higher than the previous year there could have been some reimbursement fraud. However, small increases likely shouldn't be cause for concern as costs for food and travel can fluctuate from year-to-year.

Expenses are claimed on non-work days: If a trip lasts through the weekend, employees might be inclined to report business expenses on days they aren't working. While they might feel as though this is acceptable, it isn't and could constitute reimbursement fraud. Employees can only report expenses that are considered work related, and that doesn't include anything on days that they aren't working.

How can organizations prevent reimbursement fraud?

Any company that begins to notice employees are falsely reporting expenses might want to do some research and figure out ways to prevent this from happening.

Require original documentation. In order to ensure that all business expenses are legitimate, companies should require employees to provide original documentation, such as receipts, StoneBridge Business Partners noted. These documents should be turned in after a trip and kept on file for auditing.

Employ a travel reimbursement policy. One of the best ways to keep everything on the up and up with expense reporting is to have a solid policy in place. Employees should have guidelines as to what can and can't be reported as an expense. These guidelines should be easily accessible to anyone who will be embarking on a business trip.

Have a formal review process. No matter how honest companies feel their employees are, a formal review process for expenses is necessary. This gives managers and supervisors the opportunity to audit expense reports, and ensure they are legitimate.