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Are You Letting Bad Expenses Claims Cost You Money?
Many businesses run up
expenses during their day to day operations,
from fuel costs, to dinners and hotel costs;
there are plenty of places where expenses
costs can mount up. However, far too many
businesses are accepting bad or even
fraudulent claims, and spending money that
they don’t need to.
A recent survey of over
60,000 employee expenses claims by Global
Expense has found that whilst the majority
of expenses claims are for low amounts
(under £10), there are still 12% that are
each over £100; amounts that soon add up.
This means it is extremely important to
follow your company policy for expenses,
something that many businesses simply are
not doing.
Over 15% of the
approved expenses were not part of their
company’s expenses policy! (I.e.: A policy
that states what is acceptable to be
claimed, and up to what costs are
acceptable.)
This appears to be
mainly due to one of two reasons; either the
employees are not aware of an expenses
policy, or managers do not agree with the
policy (E.g.: Maybe the allowed hotel costs
are not enough to cover a clean and
reasonable room), in which case the policy
needs to be updated.
Business travel
expenses are by far the most costly category
(38.59%), with accommodation in second
(18.77%) and corporate procurement (15.54%)
and entertaining (12.56%) in third and
fourth.
A quarter of employees
believe it is acceptable to exaggerate
expenses claims, although most only believe
a small exaggeration is okay. This means
that around 11% of all expenses payments are
fraudulent, costing businesses £585 million
per year.
Even stranger are some
of the expense claims put in by employees,
many of which were approved by their
employer:
• A receipt for £1,000
from Spearmint Rhino for 'Client Entertaining' (approved by the employer);
• A claim for expensive
lingerie because the lady had 'lost' hers
(approved by the employer);
• A claim where a man
wanted to be reimbursed for a valentines day
gift (not approved by employer)
• A claim for 'Durex
Play' - expense type 'Daily Allowance'
(approved by the employer);
• A claim for buying
the book called 'Ever Dated a Psycho?' In
justifying it, the employee said it was ‘a
book for my psycho ex'.
• A toll claim was
approved for over £570million by a sleepy
manager - the employee entered the VAT
number instead of the actual amount of the
receipt. (The error was intercepted by
GlobalExpense and the correct amount of
£4.70 was paid to the individual);
• A claim for over
EUR400 for a 'hostess in Greece' (approved
by the employer);
• Unrelated to the
previous claim, a claim for condoms. The
employee categorized the expense type as
'Tools, Test and Other Equipment '(approved
by the employer);
• A tin of cat food was
claimed under the 'Restaurant Meals'
category by an employee (approved by the
employer);
You can avoid wasting
money by ensuring that employees who make
claims know what is acceptable and what is
not (I.e.: An expenses policy). By
thoroughly checking your claims you can
ensure nothing unacceptable passes through,
however depending on the number of employees
and claims that you have this can take up a
fair amount of time.
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