T&E fraud is rampant and about to get worse

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    Talk about creative accounting! Three in 10 employees admit to fudging their expense reports. That’s from a recent survey from Procurify.

    While expense report fraud certainly isn’t anything new, the current circumstances in the U.S. and the world as a whole may be opening the door to increased temptation and even bigger financial losses.

    Here’s what you need to know to protect your own company cash at this critical point in time.

    The 5 most popular expense report scams

    Unfortunately there are countless little liberties road warriors can take that will add up to big losses for your company.

    Procurify ranked these as the five most popular types of T&E fraud now:

    • expensing a personal purchase, pretending it was for business (30%). Whether it’s office supplies or off-the-clock meals, this is the top way people take advantage.
    • exaggerating tip amounts on an expense report (30%). Hey big spenders! Looks like they might not spend as big as it appears – many are tipping more conservatively and pocketing the rest.
    • expensing the same item more than once (29%). Encourage A/P to watch dates on receipts closely to catch this one.
    • inflated the cost of a taxi ride on an expense report (23%). This makes a compelling case for having employees use services like Lyft and Uber, which generate electronic records and so are much more difficult to forge or fudge.
    • secretly accepting a refund for an already-expensed purchase (24%). This scam has become easier as employees book travel and purchase things online.

    The payment method with unexpected (and costly) consequences

    We have a good news/bad news scenario for one of the most popular payment options.

    Purchasing cards (p-cards) are a great way to streamline and centralize purchases per employee. And the built-in controls do help fight T&E fraud.

    But it seems they’re also empowering folks to overspend in ways they might not with other payment options.

    For example, check out these eye-openers from the 41% of employees who use a p-card:

    • 35% have made smartphone purchases on their p-card
    • 30% have purchased an overly expensive dinner on their p-card, while
    • 20% have bought an upgrade to a higher level of airline service on their p-card.

    Prepare for things to get worse

    But no matter what they’ve done or how they’ve done it before, you have new reason to put your radar up even further than usual when it comes to T&E fraud.

    Employees are facing uncertain times and severe financial hardships, whether it’s unpaid time off, losing a ton of money in their 401(k)s or getting laid off.

    Studies show that in times of economic strain employees are much more likely to pad expenses as a way to make some of it up … even those who’d never considered it before.

    And some of most companies’ biggest road warriors could be especially impacted: your salespeople.

    Commissions will take a serious hit in the coming weeks and months, and folks may try to “even things out” via their expense reports.

    The post T&E fraud is rampant and about to get worse appeared first on CFO Daily News.