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Expense account fraud: What you need to know to protect your business

| Sep 9, 2020 | Fraud

If you own a relatively small company, you may think that expense account fraud is something that’s a much bigger worry for large firms where there’s a lot of anonymity and paperwork jungles. As it turns out, however, small companies see almost double the amount of expense account fraud than larger ones.

Here are four of the most common ways that expense account fraud can happen:

  1. Fake expenses. It doesn’t take much computer savvy to create a fictitious receipt with whatever date and dollar amount someone wants to claim. For the employee brazen enough to claim reimbursement for expenses that never happened, that’s money in their pockets.
  2. Duplicate receipts. When an employee submits a reimbursement request twice (maybe once with the credit card bill and once with the actual receipt), it can be an honest mistake — or it could be an attempt to claim a little extra cash for themselves.
  3. Mischaracterization. Was that dinner for two in a fancy restaurant really a business expense or is an employee trying to pay for their date night on the company’s dime? Some employees won’t hesitate to stick their employer with an occasional not-work-related bill (especially if they feel undervalued or underpaid).
  4. Inflated expenses. This can happen when an employee doesn’t have actual receipts for an expense and the company is too trusting. Inflating their mileage for business trips, for example, can be fairly easy to do — especially if they’re a trusted member of the company’s team.

If your company has been victimized by expense account fraud, you need to take steps to protect both your business and your reputation. It may be wise to speak with an attorney and explore all your legal options before you decide on your next move.

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