Written by Tracey Turton, Software (Europe) Ltd
For further information please call: 01522 881300
Recent research revealed that when it comes to submitting expenses, approximately 19% of employees admitted to filing false or exaggerated claims, with many admitting to over claiming mileage by at least 10%!
Mileage generally equates to 50% of the total amount claimed through employee expenses, and also provides the biggest opportunity to falsify claims.
The disparity tightens when it comes to getting away with it. Some 90% who submitted a false claim say they were never caught by their employer. Expenses are that grey area where it is almost accepted that employees may claim for costs that maybe they shouldn't claim for.
To identify fraudulent claims without an automated solution is an immense challenge. It can take a lot of time and resources to comb through historic claims to identify the data required.
Once you can identify your fraudulent claims you can then begin to optimise managing employee expenses spend at your organisation.
If you have an automated solution to manage employee expenses, reporting and analysing this data becomes much simpler and quicker.
The graph below gives examples of what items can potentially be fraudulently claimed and the revenue that could be lost.
| 1. | Over claimed mileage: With pre-populated mileage for destinations expenses allows you to monitor and investigate any mileage which appears to be questionable. If we look at companies paying a straight 18p a mile across the board and consider the cost of a few employees will pad out their mileage for every other trip claimed. 100 employees over claiming just 50 miles can be as much as £10,800 |
| 2. | Office Worker claiming to be a home worker: To satisfy HMRC that the duties an employee performs at home are substantive duties of the employment and that travel between the employee’s home and office qualify as business mileage, certain conditions need to be considered:
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| 3. | Greater than 300 miles in a day: Many companies pay 40p a mile up to 10,000 miles, reducing down to 25p a mile after. For example a trip claiming 800 miles at 40p a mile equals a £230 profit on £90 spent on petrol! Looking for claims over 300 miles a day will not only help you to review claims for fraudulent activities but can highlight a potential liability for a company’s duty of care to employees travelling whilst on company business. A report can be set up in expenses that will show which claimants have submitted a claim for a journey for 300 miles or more. |
| 4. | Duplicate claimants to the same location: As many expense claims are generally checked individually it is hard to spot when two employees have attended the same meeting, but both claimed travel costs. An automated solution like expenses can track duplicate expenses claims allowing you to report and find these claims/claimants. |
| 5. | Same trip, different claim forms: On occasion a claimant may try and submit the same claim in consecutive months but using separate claim forms. This could be a genuine mistake when a claim occurred towards the end of a month and a claimant cannot remember if the items have been reclaimed; or an act of fraud! If a line manager has many claims to review on a monthly basis they may not spot this duplicate claim. However with expenses duplicate claims are flagged during the process, claimants can easily refer back to historic claims and it can also produce a report to see duplicate claim items using a set of varying criteria. |
In Conclusion
A percentage of all employees will exaggerate their expense claims if the system they use is not clear and you have no process in place to police it.
expenses makes the process of employees being reimbursed for legitimate business expenses easier, faster, less confusing and more accurate. And at the same time provides a powerful function to be able to police employee expenses expenditure.
About Software Europe
Software (Europe) Ltd, formed in 1989 and trading as Software Europe, is an independent computer software company providing software solutions to the U.K. and European markets. We have searched the world for the best of breed solutions and have also built our own excellent products.
Our solutions cover five main areas:
- Employee Expense Management
- Contract & Supplier Management
- IT Security Software
- Mainframe Operations
- Mainframe Development
About expenses
expenses, a leading UK based expense management system, has been designed by Software Europe to give you greater control over your employee expenses, increase your productivity and profitability and ensure relevant Tax & VAT is automatically adhered to, in accordance with HM Revenue & Customs.