Top ways to secure your business from employee expense fraud


According to the 2020 report by the Association of Certified Fraud Examiners, expense reimbursement cases account for 20% of fraud in small businesses and 13% in large organizations.

Small organizations are more vulnerable to employee fraud when compared to large organizations because they lack the resources or technology to implement complete systems of internal controls.

This blog investigates some of the most common travel expense frauds. Additionally, it discusses the tactics used by the employees while committing expense fraud. Finally, we also look at the best ways to detect and prevent expense fraud.

What is Expense fraud?

Expense fraud refers to an attempt by employees to claim reimbursements for fake or inflated expenses.

Generally, there are 4 common types of expense fraud, according to the Association of Certified Fraud Examiners. 

•  Fake Expenses

This type of expense fraud is usually done with a fake receipt for a purchase that was never made. The fake receipts are often taken from a vendor, such as restaurants, hotels, taxis, etc., and filled with false amounts.

Multiple reimbursements

This scam involves submitting reimbursement claims for the same expense multiple times. The finance team may end up approving duplicate payments if not careful about accepting expense claims.

Personal Expenses

Personal expenses occur when an employee submits a receipt of personal expenses as business expenses. For example, an employee might take a vacation with family or friends and claim it as a meeting with a client or investors.

Overstated expenses

Like multiple reimbursements, these expenses are incurred as legitimate business expenses but are over-claimed by the employee. For example, an employee buys a refundable business-class airline ticket, travels in an economy class and then submits the higher price receipt for reimbursement.

Why do employees commit expense fraud?

Companies wonder, what is the motivation behind the employee’s committing fraud and risking their job for little reward?

However, reasons may vary from individual to individual and company to company.

Here are a few reasons employees cheat on expense reports

  • Employees claim that they are running out of cash due to business travel expenses.
  • Some employees take advantage due to an unclear expense policy.
  • Some companies have inadequate resources to regulate the approval process.

Keeping your expense fraud in control

It is not wise to reimburse any expense claims without proper verification. So, safeguard your organization from expense report fraud by maintaining strong internal protocols. There are a few key steps the finance team can consider to detect and prevent fraud.

Setup automatic policy checks

Automating policy checks helps to eliminate fraud. For instance, you can set the policies to accept the reimbursement claims only for weekdays and reject them on weekends without any human intervention.

You can apply the same to travel requests and reports where you can setup approved vendors and spending limits.  To make the process of policy enforcement easier, you can rely on an expense management solution, such as ExpenseOut that can automatically identify violations and notify both the employee and the management/ finance team.

Provide your employees with the right system

You can provide your employees with the proper tools to manage the expense claim without any hassle or paperwork. ExpenseOut allows paperless expense tracking, quicker reimbursements, and extensive analytics to keep track of employee spending—all from a single platform.

Manage business expenses with corporate cards

Implement the use of corporate cards for better control of travel expenses. With corporate cards, you can get real-time insights and comprehensive visibility into spending detail.

Make smarter expense claim approval workflows

As the business grows, performing the expense claims process manually takes numerous employee hours and could still end up inaccurate, out of date, and costly.

However, automating the approval process with expense management software, like ExpenseOut is completely error-free and is easy for both the employees as well as the management. It is easy to create two or more steps in your approval workflows and customize the workflows according to your needs, which saves a lot of time.

Audit your expense reports frequently

Making receipts digital and mandatory for every expense claim helps you to avoid expense fraud. In ExpenseOut software, all claimed reimbursements are stored in a digital vault.

As a result, you can check the receipts whenever you want, keep them safe forever, and always be audit ready. Auditing your expenses is a great way to ensure that your travel and expense program is in alignment with company goals and that fraud is in check.

Mitigate expense fraud with ExpenseOut

ExpenseOut helps you to protect your organization’s financial health. Our software automates the management of expenses, and the benefits of this functionality are compelling. It reduces the risk of fraud and human error, limits the impact of lost receipts, saves report processing time, allows for faster reimbursements, and offers a more efficient means of monitoring and managing expenditure.


Nowadays, many companies are slowly getting awareness about expense fraud and are taking necessary steps to prevent it. The company should take adequate steps to enforce clear expense policies. With automated expense solutions like ExpenseOut, businesses can also automate multi-stage approval workflows and real-time policy compliance. These help to reduce errors and eliminate potential expense fraud.

To learn how ExpenseOut can help your organization, schedule a demo today and experience the AI-powered expense management system.

Reach us at for more details.

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