A 2017 study found that employees worldwide are adapting and evolving the way they fraudulently claim for their expenses. Adam Reynolds tells us more.
Ultimately there is a multitude of reasoning behind why an employee might exaggerate or make up a claim. With over half of UK respondents (51%) agreeing if they travel for work they deserve a treat and 71% using the excuse ‘most people increase the miles they have travelled’ it seems evident employees are brushing it off as inconsequential.
It could be businesses accepting or playing ignorant to fraud that is allowing the little and often technique to be that small flame that if left, quickly spreads. So what are the catalysts for the modern shift in expense fraud?
“Only ever added a couple of miles on”
It’s the domino effect of one person doing something and getting away with it, so it becomes universally accepted for everyone to follow suit. Although the more brazen fraudulent claims still exist, the 2017 research found a new favourable technique of ‘only adding an additional 20 miles of fuel’.
With mileage being the most commonly claimed back form of transport (57%) it wasn’t a surprise to learn that nearly half of employees (47%) admitted to increasing the number of miles they travelled. If this is never flagged up as a serious issue, it could be employees feel it’s completely innocent and acceptable to round up their mileage.
43% agree that everyone over-claims on expenses so they don’t see an issue with it
A bad business etiquette is something that is slowly growing worse due to the lack of checks and structure, over half of those surveyed (65%) were not aware that the company they currently work for had an expenses policy.
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Any form of tampering of an expense claim is fraud. However, it could be argued some employees see falsifying claims as a way to reward themselves for putting extra hours in, with 16% of UK office workers confessing to treating themselves, a partner or child to a present while away on a business trip.
The overall attitude towards employee expenses appears to have become apathetic, enabling employees to mimic this same behaviour and continue exaggerating their claims nonchalantly.
62% of UK respondents are still using a manual process to submit their expenses
Mileage is a notoriously challenging area of company finances, it can be easier to manipulate on a manual system as the exact journey length is harder to verify.
With 42% saying there aren’t adequate checks made to spot fraud in their current place of work and a manual process relying solely on the human eye to flag any suspicious claims, it can quickly become a popular area for fraud to fester.
Eleven times is the average amount that those polled in the past year have exaggerated or claimed for an expense at work for something they shouldn’t have – this then multiplied by every single employee could have a detrimental impact on company finances.
What is clear from the research is that negative habits in the work environment are contributing to a gradual problem that could quickly get out of hand. With UK businesses, losing around £100m each year to falsified and exaggerated claims, it’s time businesses stop that fire from spreading by switching to a digital expense management system.
About the author
Adam Reynolds is CEO of webexpenses.