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The Changing Nature of Expense Fraud

For businesses throughout the world, expense fraud is a ghostlike presence - something we know is there but struggle to see. Just like the hidden dangers posed by an iceberg, it’s this information deficit that has made any effective fight against fraud so problematic. You can’t tackle a problem until you can properly identify it.

In this white paper, we will provide the key findings of expense fraud and the information required to start winning the fight against it, including:

  • How common fraud is among the world
  • How often fraud occurs
  • Ineffective monitoring and outdated processes as contributing factors

A global breakdown of expense fraud

The research data allows us to take a closer look at the exact makeup of expense fraud - to identify those ‘hotspots’ within our organizations which pose the greatest risks. While the global challenges faced in each of the regions are similar, the findings highlight some regional variation.

The results also show the multitude of different ways that dishonest employees are finding to subvert expense systems. Alongside traditional risk areas such as mileage reimbursements, there’s a move to more sophisticated strategies - adding personal/family expenditures onto business costs.

Changing nature

The survey results show the evolving nature of expense fraud as new ways are found to exploit outdated systems. One trend that can be detected is the way legitimate business claims are liable to be ‘bumped up’ with added personal costs. Around one-in-five employees admitted to doing this. It was particularly noticeable that in North America and Australia, reimbursements falsely claimed for family and friends were actually higher than costs to cover the claimant’s own expenses. These additional costs included claims for goods, meals, and accommodation.
Mileage misery

The global theme found throughout the survey data was the widespread challenge that’s posed by mileage fraud. Throughout the regions, this was the number one cause of expense fraud - by a sizeable margin. The practice of exaggerating and falsifying road travel distances appears to be so commonplace that many don’t perceive it as a fraud. While around half of the respondents have submitted false mileage reports, only one-in-ten admit to committing fraud.

Global solutions to business expense fraud

The global epidemic we face today is the cumulative result of each and every falsified cost and exaggerated claim that goes unchallenged. It’s the legacy of the business world relying on paper-based systems that require reimbursements costs to be manually handled. With expense information scattered throughout an organization, on a multitude of documents and spreadsheets, it stifles effective expense management and provides a workplace environment in which dishonesty can flourish.

Fighting fraud

To face this global challenge, companies need to move away from traditional approaches and start to explore the advantages provided by digital expense systems which allow businesses of any size to regain control of costs. A cloud-based system such as Webexpenses reduces processing times by around 25% and cuts T&E costs by 10%. It does this by automating manual processes and virtually removing the need for cumbersome and error-prone paperwork.

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