How to cheat on expense reports?

I never thought that one day, I would once again be writing about expense fraud. This somewhat sensationalist subject comes back into the press periodically in all countries, whether it be about private or public-sector workers.

But it has to be said that the phenomenon has gathered momentum over the past 15 years as sales of expense report management solutions have continued. Now, for the first time, new clients are making a decision based on this area alone.

We are not talking about mistakes made by employees or about taxation laws being incorrectly applied. Without doubt, we are dealing with an intentional process to cheat the reimbursement process of business expenses, the second largest business cost after salary costs.

Some areas are more sensitive to fraud than others:

Mileage allowance, all roads lead to Rome

This compensates the employee for the miles travelled in their vehicle, based on an official, or the company’s own, grading scale. It is mainly used for motorised vehicles but some countries also include travel by bicycle.

For years, the experts have agreed that at least 10% more miles than there should be are reimbursed. Your company reimburses €500,000 in mileage costs, so that’s €50,000 too much.

The reimbursement rate generally takes into account the vehicle’s engine capacity. Some of your employees will declare a large engine capacity and travel around in a more fuel-efficient vehicle.

Ticket modification or cancellation, catch me if you can
By changing a first or business class ticket to a second-class ticket at the ticket office, the employee has another instant source of cash. The employee, unconcerned about their comfort, pockets the price difference. A question of comfort you tell me? But what about the refundable tickets that the traveller has refunded by cancelling their trip. This works very well in businesses who do not ask for proof of travel, for example, a boarding card.  One of our customers was dumbfounded when they discovered that an employee who spent a lot of time travelling had embezzled $200,000 over many years in this way.

The taxi fare, mighty oaks from little acorns grow 
What could be simpler than to acquire a blank receipt ready to fill in? In France, taxis are currently obliged to hand over an electronic receipt duly date- and time-stamped, including the full taxi details. This trick is therefore prevented, but most countries still have not placed controls on recording this transaction. The dishonest traveller still has plenty of scope.

The business meal, what can I get you?
Certainly, the most profitable choice on the menu. If you listen to regular opportunists, you will hear about the waiters selling “soiled bills”. A few euros paid out versus a tidy sum to be reimbursed by their company.  Of course, the business lunch did take place but the bill was less than the receipt which ended up with your accountant.

There are a number of variations:

  •  A family meal or meal between colleagues which ends up on an expense claim by adding a few aliases.  Risky but commonplace.
  • The blank bill that the employee fills in themselves, easy and almost undetectable.
  • And also big organised crime, seen in big business.  Fraud by buying receipt books from a bookshop and making counterfeit restaurant stamps.
  • Using our solution, we also find employees who go around the office taking each other out to eat, to then have all their meals reimbursed at the end of the month.

Above and beyond the dishonesty of some travellers and the money reimbursed in error, the business runs the considerable risk of being subjected to an adjustment from the tax authorities.

Our French readers will find useful information on the Urssaf website. https://www.urssaf.fr/portail/home/employeur/calculer-les-cotisations/les-elements-a-prendre-en-compte/les-frais-professionnels.html

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