How to prevent expense reimbursement fraud
Expense report fraud cases vary in egregiousness, but all of them silently siphon funds from your bottom line. For example, an employee may expense a $20 Starbucks run, but actually purchase a gift card for personal use. Maybe your sales manager booked a pricey Airbnb in an expensive city, but really stayed at a friend’s house, which he convinced them to list for an exorbitant price in exchange for splitting the profits. An executive may have expensed a dinner that was actually a visit to a strip club. While these examples may sound extreme, you name it, we’ve flagged it.
With audit teams too strapped to take a close look at expense reports, and managers making a practice of rubber-stamping reports, this type of behavior too often flies under the radar. AI helps spot employee expense fraud by quickly and comprehensively scanning all expense reports for risk factors, such as purchase amounts that don’t match receipts, receipts from unapproved vendors (ahem, strip clubs), out-of-policy spend (e.g., alcohol or flight upgrades), and more. Some of the most common expense fraud risk factors AI looks for include:
An employee submits a receipt for a client dinner in March, then the same receipt again in May.
Spas, strip clubs, golf courses, dog kennels, jewelry stores… the possibilities are endless.
These include booking personal flights on a business card, buying an expensive flight then cancelling and rebooking to pocket the difference, upgrading to business class.
If employees think they’ll get away with it, why wouldn’t they order the most expensive whiskey on the menu?
If employees know that you’re using AI to track expense reports, they’re likely to be a little less… adventurous with their expense reports. This understanding creates an atmosphere of accountability within your organization, without pitting managers against employees or taking up tons of your audit team’s time. Plus, AI identifies patterns within your organization’s spending behavior so you can proactively address systemic expense report fraud or determine if your T&E policy needs to be adjusted.