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When Expense Reports Rhyme with Fraud

Dealing with Expense Reports is an already daunting task for the accountant and the manager. Having to deal with fake reports is even more nerve-wracking because oftentimes it’s difficult to really tell whether the mistake was a mere human error or actually a fraud attempt. There are, however, many signs of actual fraud that can be spotted that we will address in this article along with the reasons that push employees to commit fraud in the first place.

Signs and ways your employees may be committing Expense Reports Fraud

Some Employees are spending more than others

If you have employees who hold the same position but who are not expensing the same amounts, something is wrong. Employees in the same position should have similar expenses. Moreover, even if the exaggerated claims weren’t necessarily fraud, you need to train your employees on where to eat or where to stay while traveling.

Employees expensing non-business related items

A spa in a five-star hotel is probably not a part of your expense policy. You need to clarify the types of expenses allowed in your business to avoid this misunderstanding.

Employees inflating expenses

Standard expenses like a taxi ride can be inflated and still look normal, which is why this type of fraud often gets overlooked.

Whenever possible, a receipt for small expenses must always accompany claims. To avoid this from happening, some companies set a limit on the reimbursable amounts allowed without a receipt.

Taking advantage of receipts in foreign languages

Receipts from Asian countries like Japan or China are often very hard to read even by AI-based systems. It can be hard to determine the nature of the expenditure and the employee can, therefore, expense it the way they please.

Manipulating exchange rates

With no exchange rates policy, employees can choose whichever rate they find the most attractive. Nothing would prevent them from adding a difference in their favor.

These are a few of the many tools dishonest employees use to make some extra money, in order to try and limit this, here are a few ways you can intervene as the manager.

How to act against expense reports fraud

Today, software is the essential equipment for detecting and, most importantly, preventing potential fraud. You benefit from an automatic update on a regular basis, which is very important, especially in the event of a change in the mileage expenses scale. But before automating your way to manage expense reports, you need to have the basics first.

Establish a professional spending policy

An expense policy is a set of rules to be respected by any employee who provides expense reports.

When it’s poorly drafted or poorly communicated, an expense policy does not prevent fraud, because your employees may submit fraudulent expenses without even knowing it, or if there are no consequences, they may willingly commit fraud knowing they will not be sanctioned for it.

Read our article on how to develop an expense policy within your company.

Use your data

One of the best ways to control expense reports effectively and thus reduce fraud is to use the data, especially for comparative analysis. This will allow you to easily identify differences between units, employees or entities and then investigate.


The solution to limit fraud in expense claims is the need to digitize this management process! There are intelligent solutions designed to automate the management of expense claims from receipt to accounting by injecting technologies such as Artificial Intelligence, Machine Learning or the Cloud. Smart features optimize this process and limit the risk of fraud.

How Expensya helps you limit fraud:

Automatic data entry

OCR+ intelligent recognition technology captures expenses for employees. In addition to offering advanced end-of-pipe analysis capabilities (detailed in the Business Intelligence section), the advantage of this technology is that it allows you to collect a great deal of information from the invoice. OCR+ is able to detect up to level 3 data, such as the number of nights spent in a hotel, to extract the price per night or the amount of the tourist tax.

Automatic detection of duplicates

Duplicates are one of the main sources of corporate fraud. Expensya makes it possible to automate the detection of duplicate expenses. Indeed, two similar expenses can now be detected thanks to algorithms that compare different variables to determine if there is a risk. Through an alert system, the validator can directly compare the suspected duplicate with expenses that appear to be close.

Optimized validation flows

Expensya optimizes validation flows and the way expense reports are controlled. In addition to being able to develop validation flows by hierarchy or by project, and to set up up to 5 levels of validation, an alert system alerts the validator of any non-compliant expenditure, or that appears to be a duplication. Then, a calendar view allows the validator to identify if there is a daily, weekly and monthly consistency of the expenses incurred. In addition to this, mobile validation allows verifiers to react quickly and ensures total fluidity of the process, which actually takes place progressively.

Automation of the control of compliance with the expenditure policy

This is one of the key features of an intelligent expense management solution. For example, Expensya allows you to configure an expenses policy with rules to alert the auditor, block certain expenses and set automatic limits. These rules can be configured according to a multitude of parameters: the amount of the expense, the date and type of expense, the presence or not of guests, the possibility of re-invoicing the expense, etc. These rules automate two elements: communication on the company’s expense rules, and compliance control, and thus reduce fraud.

Business Intelligence

Thanks to an ultra-advanced BI module based on Data Lake technologies and with a rendering generated by Power BI, and various algorithms, Expensya allows in-depth analysis of expenses to detect numerous anomalies. Comparisons at different levels (employee, unit, entity, country) will allow you to detect who is spending more than others, and even what expenses seem abnormal compared to market prices. You identify trends or inconsistencies and can control business expenses, detect anomalies, adapt existing rules and even optimize decision-making and better control your budget

If this convinced you to digitize your expense reports management ways, try Expensya for free for 30 days!

Customer stories

Discover the ways that Expensya customers are simplifying their travel and expense management with a solution that just works.

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More expense management, payment and travel resources

Our library of case studies, videos, events, guides and reports are available to help you more efficiently manage employee expenses.

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Expensya Barometer Report

Learn about the trends in the “what” and “how” of employee spend, pulled from actual expense management data, in the annual Expensya barometer report.

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