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Travel & Expense Purchase Card

Trick or Treat: Are Employees Padding Expense Reports?

on October 30, 2017

Bring out the candy corn; Halloween is just around the corner. It’s a time for frights and spooks, treats and, yes, one too many tricks. Thankfully the tricks last just one night for most of us. But, for finance and T&E managers, the phantoms and tricksters who can make the expense report process a nightmare come out every day, not just once a year.

Unlike the Halloween tricksters who toilet paper your front lawn, in most cases of expense report issues, employees are not intentionally trying to defraud you. They simply are not aware they are breaking company policies. Yet, some employees are vampires draining money from the company by taking advantage of an expense report audit process that doesn’t look at every transaction or the historical records of employees. With a bit of fun in mind, we hope to highlight just a few of the tricks that employees use to pad their expense reports. The temptation to trick the system is real and the following examples show just how spooky things can get in any T&E program.

  1. Ghost mileage: One common method for employees to get additional dollars through reimbursement is by claiming more miles when using personal vehicles for company business. This exaggerated expense padding is easy to do and can be a wide spread problem if not checked. Additionally, gas reimbursement though not as popular as it used to be, still can be a way for employees to pad expenses especially if they pay with cash.
  1. Phantom expenses: Passing off personal expenses as a business expense can be challenging for any T&E manager to catch. A common expense would be for meals and drinks that were not work related and could happen while at home. Phantom expenses can also occur with everyday purchases like gifts for loved ones, or taking a friend out to lunch and claiming it as a business meeting.
  1. Zombie Receipts: Some employees submit a receipt for approval in January and then again in March and maybe even again in August in hopes that it won’t be noticed. The receipt that never dies can even be submitted to different managers in the company for additional reimbursement opportunities. Without every transaction being monitored this kind of trick can slip through the cracks.
  1. Receipt Switcharoo: Though not common, switching and even altering receipts happens. It can be something as simple as getting a blank receipt from a taxi driver and the employee adding $20 above the actual paid amount. In some cases an employee may purchase a year’s supply of paper or office supplies for $300 and submit for reimbursement. Once the receipt is submitted for reimbursement, the employee then returns half of what was purchased for additional dollars in their pocket.
  1. Magic Carpet Ride – Flying but Not Flying: There are those travelers who believe they can trick company policies by purchasing flights to multiple locations, only to then cancel a portion and end up where they wanted to go in the first place. The receipt is submitted with the full flight and then the canceled portion is credited back to the employee’s credit card. The employee walks away with the difference.
  1. Witches Brew: Packing on the miles with nothing to do during down time usually entails travelers ending up in a hotel or local bar. Most companies don’t like the idea of paying for alcohol unless it is for business reasons. These witches’ brews can often be hidden when itemized receipts are "lost" or a credit card statement that doesn't show itemized items is submitted; all of a sudden the employee is drinking for free.

We don’t believe that everyone is purposefully breaking the rules and in fact we know that most employees simply just don’t realize they are making errors and causing risk for the company. But, for the tricksters who are padding their expense reports, having the right policies in place and leveraging Oversights Insights On Demand technology can dramatically reduce the chances of being tricked and make your T&E program a treat to manage. For more information on high risk employee activities see our latest infographic.

Jessica Kirk

Jessica Kirk is Vice President of Marketing at Oversight.

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