We recently surveyed more than 1,000 frequent business travelers, 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 travelers, 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 organization’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 organization can protect itself against fraud, download the whitepaper, 10 Ways to Prevent Business Expense Fraud. You can also help your organization create an expense policy that can keep your employees (and CFO) happy, based on our handy expense policy template.
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Wow! This Chrome River is great. Word has spread [in our firm] and people that were not invited to be in the pilot group rollout have asked to be included!