Several surveys indicate that travel expense fraud is a problem at all levels of the corporate ladder. It can be tempting to think that “the little guy” is more likely to charge personal expenses to the company, but this is a bad assumption. In one study by the Association of Certified Fraud Examiners, 27% of expense fraud cases involved executives and upper management. In a small survey of 1000 business travelers 13.9% of senior VPs admitted to committing expense fraud. Often a senior executive will not make his own travel expense report, but get his assistant to do it. An assistant who has to do what the boss says. This adds an extra layer of difficulty for the accounting department charged with combatting the problem. What is a cost manager to do?
1. Automated Processing Is Your Friend
With online solutions, apps and other uses of technology you will get close to real time reporting of expenses. This means that in many cases, your upper level management people will be forced to do their own reporting, as assistants may not always travel with them or be available when expenses are made. This makes it easier to hold them accountable. Good software will also give you better analytical tools. You can compare expenses between different VPs more easily, and because your staff is not bogged down in paperwork processing most of the time, you will have more resources to look for questionable expenses.
2. Don’t Ignore The Executive Suite
When new travel expense report policies, procedures, or software are rolled out, don’t overlook the top floors in your communication. Insist on briefing upper management just like everyone else. Consider calling a separate session for the assistants, interns and other support staff who may be tasked with preparing expense reports for the executives. You can’t expect these people to police their bosses, but if they are well aware of what the policies are and how the software works, they can indirectly keep the higher ups honest when it comes to filling out that travel expense report.
3. Clamp Down Fast
With the right software, you have the ability to catch questionable expenses faster. This in turn affords you the chance to follow up quickly as well. A lot of fraud is committed because people got away with it once, then twice and soon enough it becomes a habit. If you catch someone, politely, the first time, there is much less chance of there being a second time. Nobody likes to feel embarrassed, and having a travel expense report questioned by accounting can go a long way to dampen the urge to fudge receipts on the next trip.