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Travel & Expense Purchase Card

7 Ways Naughty Employees Try to Cheat on Year-End Expense Reports

on December 12, 2018

The most wonderful time of year doesn’t just bring lots of nice holiday parties, gifts, and good cheer. Like the Grinch who stole Christmas, it also brings out more than a few employees who try to fatten their bank accounts with phony, duplicate, or questionable travel and corporate card expenses.

We generally see a spike in expense reports in December and January. And with those higher volumes, cheaters find it easier to stay under the radar and avoid detection. Here are 7 ways that employees try to cheat on year-end expenses. 

  • Gifts and Gift Cards. The season of gift-giving extends to the office, too, with gift baskets and gift cards leading the list of corporate card expenses. A few employees may be tempted to slide in a few extra gift cards for their family and friends. Now is the time to send friendly reminders to employees to ensure internal and external gifts comply with your company gift and gift card policies. And it never hurts to mention that your department closely monitors travel and corporate card expenses to keep would-be thieves at bay.
  • Holiday Meals and Parties. Many managers take out their teams to lunch or dinner during the holidays. But, if you see way more celebrating than usual, or if the per-person cost is closer to $100 than $20 or $30, there may be a problem. Be sure to require employees to account for all attendees appropriately on the tab. By enforcing your company’s financial controls, you can help keep honest employees honest, and keep the few bad apples from draining cash from your bottom line.
  • Miscellaneous. Keep a close eye on miscellaneous spending. It’s the perfect place for those expenses that don’t fit neatly into the usual categories. It’s often the place where some cheaters may bury questionable expenses and try to slide in a few personal items. While these items may not amount to more than $20 or $30, the cash leakage can add up to a pretty big chunk of change over time across thousands or tens of thousands of employees.
  • Cash Advances. Some companies allow cash advances as part of their internal policy. However, business travel often falls off significantly in December. So why are they getting a cash advance? At one company, an employee had been regularly charging $200 as a cash advance on the corporate card and marking it as personal for several years.
  • Personal spend. Watch corporate travel and purchase card statements for a suspicious spike in personal spend. Some companies allow employees to use their corporate travel and purchase cards for personal items, so long as they flag it as such and pay that portion of the bill. But if your company is floating hundreds or even thousands of dollars in this way, you may have a risky employee on your hands.
  • Out-of-Pocket Spend. Beware out-of-pocket spend. Like personal spend and miscellaneous, out-of-pocket spend can be exploited by employees for their personal gain. For example, by over-claiming restaurant server tips, an employee may be picking up a few extra dollars on each tab they claim on an expense report.
  • Duplicate Expenses. The memo goes out at the end of the year, reminding employees to submit their expense reports by a certain date. However, some employees may take it as an invitation to slide in a duplicate expense report to get reimbursed some extra cash. Others may seek out more than one proof of payment for a single item and then submit these forms to different supervisors to get paid twice. Depending on the size of the company and the volume of expense reports at the company, some employees can even get away with getting double reimbursements. Keep an eye out for the scammers by using Oversight to help you quickly detect and prevent duplicate expenses.

Remember, not everyone is purposely breaking the rules or re-submitting an expense report for reimbursement. Most employees are honest and may have the best of intentions when it comes to expense reports but are guilty of the occasional mistake. With Oversight Insights On Demand®, you can find out who’s been naughty or nice and stop T&E and P-Card fraud and waste.  

Download our handy Best Practices Guide to Detect and Stop Employee Expense Fraud.

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Beverly Kays

Beverly Kays brings extensive finance, accounting, and supply chain operational experience to her role as Client Engagement Manager at Oversight Systems.

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