We recently surveyed more than 1,000 frequent business travellers, to see just how honest they are when it comes to submitting their expenses. The good news is that 94.7 percent say that their expense reports are done honestly. The bad news is that the other 5.3 percent equates to about 1.1 million business travellers, who combined cost their employers $2.8 billion per year. Those who admit to committing expense fraud do so to the tune of almost $2,500 per year on average.
So just who is most likely to do this? Well, they’re overwhelmingly male (73 percent), with a median age of 46. The role that is most likely to commit expense fraud is a senior vice president (13.9 percent admit to doing so), and the industries which see the most fraud are entertainment (almost one-in-five in the industry claims to submit fraudulent expenses), and travel and transportation (17.1 percent).
More alarming for the employers is that barely one-in-six (17 percent) perpetrators gets caught, so it’s likely that much of the $2.8 billion remains undetected and unrecovered.
However, it’s not all doom and gloom. The research shows that the introduction of automated expense management software reduces the incidence of expense fraud by more than two-thirds. Simply by implementing a solution where employees know that an organisation’s expense policy is being enforced can often provide a suitable deterrent for most. Those who submit their expenses either by giving receipts to an administrator or with a spreadsheet are three times more likely to commit expense fraud than those who use an automated solution.
If you would like to know more about how your organisation can protect itself against fraud, download the whitepaper, 10 Ways to Prevent Business Expense Fraud. You can also help your organisation create an expense policy that can keep your employees (and CFO) happy, based on our handy expense policy template.
- IDC Recognises Chrome River as a Leader in Enterprise AP Automation Solutions
- 9 Signs it’s Time to Switch Expense Management Systems
- Gartner and Ardent Partners Advise How to Build a Best-in-class Accounts Payable Operation
- When Cash (Control) is King: Is Your Accounts Payable Strategy Optimised for a COVID-19 World?
- Getting the Most Out of Your Spend Data with Emburse Insight Advisor
Our choice of Chrome River EXPENSE was made in part due to the very user-friendly interface, easy configurability, and the clear commitment to impactful customer service – all aspects in which Chrome River was the clear winner. While Chrome River is not as large as some of the other vendors we considered, we found that to be a benefit and our due diligence showed that it could support us as well as any large players in the space, along with a personalized level of customer care.
We are excited to be able to enforce much more stringent compliance to our expense guidelines and significantly enhance our expense reporting and analytics. By automating these processes, we will be able to free up AP time formerly spent on manual administrative tasks, and enhance the role by being much more strategic.