Fortunately for many businesses, the vast majority of the time there is an error in expense reports, it is simply because of honest misreporting. Employees, either in a rush, or through ignorance, fail to correctly report a few transactions here and there, or get the numbers wrong because a receipt it lost and they need to make a substitute in order to have something to include in the expense report.
But some employees go far beyond an error of memory or lack of time. In some instances, employees will deliberately fake a receipt to inflate their expenses, or even provide entirely false expenditures in the hopes that the company will then essentially give them money for nothing. It’s sad this happens, but for a very small subset of malicious employees, this is a regular practice.
This doesn’t mean that companies are defenseless. There are ways of fighting even a fake receipt, and using a credit card system is one of them.
How It Happens
Faked receipts occur in a number of different ways. Older, more traditional means have involved modifying the existing receipt, doctoring it with new numbers. Some fake receipts can be secured from the restaurant or store that provided a service by requesting blank receipts that will be filled out later.
In recent years, one unethical company has come out and provided free manufacturing of fake receipts on request. In order to hide their true intent, they market themselves are a “novelty company,” and thus do not actually encourage people to deceive employers, though they do make a note of the fact their receipts are difficult to distinguish from the real thing.
Credit Cards Help
If you decide to use a company credit card for your employees when they travel, this, coupled with a modern solution like ExpensePoint expense reporting software, can have a big impact on fraudulent receipts. A company credit card’s single biggest advantage is that the actual expenditure is instantly recorded and stored not just for your perusal, but that of the credit card company itself.
When this is combined with something like ExpensePoint, which automatically logs any credit card transaction, it does two things for a company. It allows honest employees to make painless expenditures that don’t even require filling out a new report, since the ExpensePoint automatically does it.
More importantly, for the company, this means that fake receipts immediately become useless. The typical trick of having a cheap dinner, for example, that is then paid for in cash and substituted with a doctored receipt no longer works. The discrepancy between that the credit card transaction reports and what the receipt says makes it obvious that tampering has occurred. Faking a credit card transaction is extremely difficult for the average employee as it requires a staggering amount of technical and hacking knowledge in order to succeed.
By moving over to a credit card for traveling expenses, employers make their employees’ traveling lives simpler and easier, while at the same time creating a huge barrier that makes submitting fake receipts much more difficult.