How much was that dinner again? Although T&E violations aren’t exactly rarities, they could be happening more than you’d think.
Fifty-four percent of employees admitted to going rogue with T&E expenses, a recent Coupa Software survey found. Additionally, 66% of those employees said they had made “risky purchases” on company money. Those purchases include overly expensive dinners, office supplies for private use, airline upgrades and personal clothing items.
These employees know fraud hurts the company. When surveyed, 58% of employees estimate they and their co-workers cost their companies $25,000 a year in T&E fraud. And some didn’t stop there: 9% of employees estimated T&E fraud costs $100,000 and 6% said it could be more than $250,000 a year.
Frustrations lead to fraud
What’s causing this rampant T&E abuse? Employees could be taking out frustrations with T&E policies on the company bank account. In fact, an overwhelming majority (84%) of employees claimed that they either didn’t understand their companies’ policies or they found those policies difficult to work with.
They cited too many levels of approval, feeling pressured to get a good deal and fear of being denied reimbursement as their biggest problems with T&E.
What you can do about it
Here are a few things Finance can do to fight fraud:
- Make sure your policy is understandable. Ask a few employees outside of Finance to read through your rules and give you feedback on clarity. Add specific examples of what is refundable and what isn’t.
- Audit expense reports randomly. It could be too time consuming to go through each report. Auditing randomly will allow you to get a feel for how well employees understand your T&E policy. Plus, knowing they may be audited will be a fraud deterrent.
- Add more levels of approval for employee expenses. Yes, it was one of the things employees complained about. But that doesn’t mean it’s not necessary. If single-level manager approvals aren’t curbing extra spending, it may be time to put in another approval level.
