LOS ANGELES, MARCH 29, 2016: Expense fraud committed by employees is estimated to cost U.S. businesses more than $2.8 billion per year, according to a survey of over 1,000 business travelers conducted by Chrome River, a leading provider of expense management and supplier invoice processing software.

Although more than 94 percent of employees who submit business expenses claim to do so honestly, those who commit fraud claim an average of $2,448 in false expenses per year (although some individuals admit to claiming as much as much as $25,000 per year). Across the entire U.S. workforce, this equates to more than $2.8 billion in total annual losses, with more than 1.1 million individuals submitting fraudulent expenses each year.

Almost half of all those who defraud their employer submit reimbursement claims for personal purchases, while more than a third claim for additional mileage while driving on company business, and three in 10 over-claim for tips that they have given. Only 17 percent of those who committed expense fraud were caught.

Expense fraud also has a tendency to be committed by those who an organization would typically trust the most. The role with the highest rate of expense fraud, at 13.9 percent, is senior vice presidents. Almost three-quarters of those who commit fraud (73 percent) are male, and the average age of perpetrators is 46.

One solution for reducing expense fraud is through technology. The incidence of fraud among those who submit through an expense management solution is 68 percent less than those who submit manually by sending in receipts and a spreadsheet, or simply give receipts to an administrator.

“While it is certainly heartening to see that most employees are honest, the financial impact of expense fraud cannot be underestimated. These statistics show that expense fraud could be committed by even those in the company who are least expected to do so,” said Alan Rich, CEO of Chrome River. “Companies can step in to encourage honesty with a few simple steps. Reducing temptation by implementing expense policies and processes can have a dramatic impact on minimizing fraud.”

More information on how companies can minimize their exposure can be found in the white paper 10 Ways to Reduce Expense Fraud and Abuse.


Commonest types of expense fraud committed (percentage of those who committed fraud who admitted to each type):

Personal purchases claimed as business expenses
(e.g. meal with spouse)
Adding mileage to journeys
(e.g. driving 25 miles in your personal vehicle but claiming for 40 miles)
Tips recorded higher than what was actually given
(e.g. leaving a 10% tip at a restaurant but claiming for a 20% tip)
Submitting more than allowed for an item
(e.g. $30 for dinner when your limit is $25)
Receipts for canceled events or trips / returned items 10.3%

Percentage of respondents of each role who admit to falsifying expenses: 

Senior Vice President / CXO 13.9%
Blue-collar 9.7%
Vice President 6.9%
CEO / Owner 6.4%
White-collar, non-managerial 4.8%
Manager 4.8%
Director 4.1%

Percentage of respondents in each industry who admit to falsifying expenses: 

Entertainment 19.0%
Travel & Transportation 17.1%
Food & Dining 16.7%
Business Support & Supplies 10.0%
Automotive 9.5%
Education 6.2%
Manufacturing, Wholesale, Distribution 6.0%
Health & Medicine 5.2%
Real Estate 4.2%
Computers, Software & Electronics 3.5%
Government 3.5%
Legal & Financial 3.2%
Non-profit 3.1%
Retail 2.9%
Construction & Contractors 2.7%

The survey was conducted online of 1,072 business travelers between February 19 and 25, 2016. 

About Chrome River

Chrome River Technologies, Inc. provides expense reporting and supplier invoice automation solutions that combine the latest enterprise and mobile technologies with a team of industry-leading implementation and support experts. Chrome River delivers immediate payback via a software as a service delivery model that requires no hardware, no software, and no long-term commitment. This service is easily configurable to meet the needs of organizations worldwide with sophisticated expense management policies and collaborative approval processes. Request a demonstration today and locate additional information about Chrome River and its solutions by visiting the company website at www.chromeriver.com or by calling +1.888.781.0088. 

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