Posted on by Jessica Peaty

5 Steps to Help Avoid Expense Fraud

In a business world that’s increasingly focused on cost efficiency and profitability, it’s understandable that employee fraud is under a bigger spotlight than ever. Staff fraud is a major business risk in workplaces today according to a revealing CIPD study. .big-number { font-size: 3rem; background: #ff9911; color:#fff; display:inline-block; box-sizing:border-box; width:100px; height:100px; -webkit-border-radius: 50%; border-radius: 50%; padding: 25px 0; }
70% of those surveyed admitted they’d commit fraud if they could “get away with it”

The document quotes figures from BDO Stoy Hayward’s FraudTrack Report, stating that staff fraud experienced a sharp 80% increase year on year in 2005. With alarming statistics like these, it’s clear that the issues around such fraudulent activity need to be understood, and tackled head on.

The real issues

The reasons for staff fraud are typically varied depending on the business type, along with the way organisations interact and monitor their employees. An increased pressure on workforce output is just one key factor for fraud cited by the CIPD. In addition to this, changes in business models, and remote satellite offices have led to less connected and loyal teams. Worryingly, in a report from Leicester University 70% of those surveyed admitted they’d commit fraud if they could “get away with it”, highlighting the scope of the problem. Ultimately, fraud can undermine a company’s reputation, create tension within the workplace and have serious financial and legal ramifications. In order to counter this, clear processes need to be in place to give the right people the resources and power to effectively investigate. Expense policy is one core area under scrutiny. It’s a crucial part to the running of day to day businesses, but despite this, there’s a real lack of consistency in expense procedure.

5 steps to avoid expense fraud

Set a clear policy
One of the main problems is a lack of consistent, transparent and understandable expense policies. Staff should have a thorough understanding of what is and isn’t allowed with a fair, jargon-free and uncomplicated expense procedure. Encouraging feedback, fully initiating staff with the do’s and don’ts and clearly communicating any changes is vital, so employees know where they stand.
Promote a standard approval process
Confusion around how to claim, what to do, who to speak to and how long it will take are all common issues with expenses. Most people in businesses today are time poor so a prescribed process needs to be in place. This reassures managers and employees that submitting and claiming expenses is a straightforward, routine practice with clear steps.
Streamline with effective software
With the help of specialised HR software, companies can actively discourage and monitor dishonest behaviour. Automated expense reporting checks and balances can be performed, looking at company policy and spend limits. While duplicate entries and suspicious transactions are intuitively flagged. It also gives businesses the tools to download credit card or purchase data and scan receipts, so everything is in one easy to manage place. Then configurable workflows ensure management approval before expenses are paid.
Have a concise reporting system
Having an easy to use system is the fastest way to avoid expense fraud. Expense forms should always request the purpose of each entry detailing who, why and when. In line with this, routine checks should be in place for expenses. Proactively monitoring them, rather than working reactively when problems arise.
Promote a positive internal culture
Setting a good example from the top down is imperative to instil respect in the expense system. Employees will often look to their managers and directors to understand what’s acceptable. Managers should deal with expenses in a timely and professional manner, feeding back to employees where necessary.


With the right attitudes, policies and software support, expense fraud is an issue that can be managed. Rather than relying on antiquated ways of recording and claiming expenses, companies need to take a professional and proactive approach to training employees on best practice, championed from the top down. With all these measures in place, minimising the effects of expense fraud is an achievable goal in every modern workplace.
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