Five Fraud Tactics and Tips to Find Them in Business Travel Expenses

T&E or Travel and Expense management is considered one of the most difficult costs to monitor and control. If you are a card manager or CFO, some common problems you may be facing include not knowing how much the business is spending on T&E as well as being able to detect expense fraud.

It may take months to more than a year on average to detect T&E fraud resulting in losses to the tune of thousands of dollars. To prevent this, it’s important to keep your eyes peeled for common fraud tactics that may be hiding in business travel expense reports.

Here’s what you’ll want to look out for along with tips to help lighten the burden of monitoring business travel expenses manually.

1. Miscategorized Transaction

Most employees are honest when submitting expense reports. However, a cardholder who is intentionally trying to hide an out-of-policy travel expense will likely be to miscategorize the transaction. For example, if someone makes a personal purchase that they want to get reimbursed for, they might find it easy to try to count it as a business expense by stating a business-related reason. You may see this in the form of someone buying a meal or cup of coffee during a trip. Then, adding a gift card to their purchase. Or, they may just do some leisure shopping or pay for sightseeing with their T&E card. Consequently, this would not fall under the category of an approved business expense.

This is why it’s important to validate receipts, check the data you’ve been provided with, and know your card policy well. An annual or bi-annual policy review will help familiarize everyone with approved travel expenses and approved suppliers so spending can remain compliant. This is also a great opportunity to update your travel policy as needs evolve.

2. Non-Optimized Receipts

One of the most common expense fraud tactics for travel involves submitting incorrect or fabricated receipts. Receipts should be clear to view and show an itemized account of each purchase. Meal receipts that just show the card total and not the actual items bought are not helpful and could indicate fraud.

Also, receipts that are submitted with certain areas conveniently covered or illegible are also questionable. In rare cases, manipulating an entire receipt is definitely possible thanks to a few internet tools.

Card Integrity’s thorough expense monitoring tool that focuses on level three transaction data information is extremely helpful in these cases. Level three transaction data provides the specific line item details (identifying the specific item purchased) with a card including the specific item amount. That way, you can match up this distinct data with the receipt submitted to confirm its authenticity.

3. Overstated Expense

Don’t make it easy for someone to get a larger reimbursement than they deserve due to overstated expenses. A common area of business travel expenses to watch is vehicle mileage and fuel purchases. Check to make sure the employee actually had a rental car within certain dates if they submit a gasoline receipt for reimbursement – whole numbers on receipts.

It’s also crucial to have a system in place that tracks refunds cardholders might receive in a timely manner. For example, if an event gets canceled or a hotel stay is discounted, any refunded money should get paid back to the business and not pocketed by the employee.

4. Duplicate Reporting

Business travel expenses can easily be reported twice. Employees may do this knowingly (in an attempt to get reimbursed twice) or on accident as an honest mistake. Either way, it costs the company extra money and should be avoided.

Clarify how employees should submit receipts for reimbursement in your card policy. In addition, smooth lines of communications between departments so that two or more people are not processing the same person’s reimbursement.

5. Shipping Items to a Personal Address

Overall, your expense monitoring efforts should include business travel purchases made via online orders as well as in-person spending. More companies are allowing employees to work remotely. This can make it easier for someone to ship purchases to their personal home address rather than the business. With an Amazon Business account, for example, you’ll want to make sure you’re monitoring the purchases that are made and if the shipping address is being changed to a personal address.

This won’t happen in every case, but allowing someone to ship items straight to their home can increase the chances of expense fraud.

Make sure your card policy clearly states whether shipping business items to a personal address is prohibited. If you decide to allow some purchases especially for remote employees, specify in your policy what’s approved to ship to their homes and which items are not allowed. To prevent this fraud tactic or misuse from appearing in your travel expenses, start by keeping your policy updated and providing employee training on the policy.

Simplify the Process of Validating Business Travel Expenses. Find Expense Fraud Easily.

There can be a lot of expense fraud tactics used for business travel expenses. However, you don’t have to bear the burden of monitoring these expenses all alone. Card Integrity’s DataWISE expense monitoring service works to find potential fraud and wasteful spending for you. Our customizable tool is tailored to your specific card policy and provides you with accurate expense reports each month. DataWISE also provides alerts for employee spend errors or refunds so you can keep track of T&E expenses with ease.

If cost savings is a key goal this year, you’ll want to monitor your suppliers as well as T&E card expenses. Card Integrity provides supplier insights to help you determine whether you’re getting the best savings or should plan to cut costs in the future.

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