It’s a good bet that companies who don’t take a hard look at their Travel & Expenses management are losing money.
And by losing money, we mean being defrauded.
The evidence is right there in plain sight on expense reports, warns expense management company Certify.
While employers trust all of their people to “do the right thing” when making business purchases on the road, experienced T&E fraudsters know they have an advantage.
Duping a system fraught with human error and the pitfalls of a manual review process is always easier.
And while the effect of fraud can be devastating to companies of every size, small businesses on average bear a far greater cost.
Understanding the scope of the problem and how to recognize expense report fraud is the first step to protecting your company assets.
Why every company should care
Expense report fraud can have a significant negative impact on the bottom line. For example: U.S. companies will spend an estimated $186 billion on T&E expenses in 2015, $1 billion of which will be lost due to fraud, according to JP Morgan.
- Mischaracterized expenses. These are reimbursements requested for a personal expense by claiming it was business related.
- Overstated expenses. This involves altering receipts to request reimbursement for an inflated amount.
- Fictitious expenses. Seeking reimbursement for fake purchases with altered or fraudulent receipts.
- Multiple reimbursements. Expenses submitted on multiple reports targeting a weakness in administrator visibility.
The ‘little guys’ are at greater risk
Fraud loss for all companies is significant, but small businesses bear a substantially higher cost per loss. Keep in mind that:
- The median expense report fraud loss for small businesses in 2014 was $30,000.
- Companies with fewer than 100 employees have a 28% higher median fraud loss than businesses with 100 or more workers.