Complacent Managers Thwarting Expense Report Accuracy

Exaggerated claims on expense reports are challenging businesses’ ability to manage employee spend — and their own.

A new survey released by travel and expense management company Concur revealed some of the ways manual expense reporting processes are harming employees and the companies they work for, despite automation and digitization having taken off in other parts of business spend processes.

The data also highlights how both employees and their managers are to blame for inaccuracies and fraud.

There is a 50/50 split between the number of employees that feel embarrassed between submitting small-value expenses (like newspapers or bus fares) and those that feel it is perfectly acceptable. But Concur’s report also found that nearly a quarter (23 percent) of employees agree that it is acceptable to exaggerate expense claims.

It’s not just employees that are responsible for fraudulent or inaccurate expense claims, however. The data also found their managers are in on the issue.

Of the managers surveyed, 39 percent said they admit having signed off on an expense report submission that they believed was noncompliant with company rules. A whopping 68 percent said they spend less than 15 minutes reviewing expense reports submitted by employees, and 17 percent spend less than five minutes on the task.

“Workplace expenses can often be a complicated minefield for employees and managers,” said Concur Managing Director of U.K. Enterprise Chris Baker in a statement. “This is exacerbated by archaic, time-consuming processes and unclear boundaries of what does and does not constitute an acceptable claim.”

“At a time when staff are busier than ever before and the traditional lines of the nine-to-five workday are blurring, it’s vital that businesses ensure there is a modern, digital solution in place for expense management,” the executive continued. “This not only ensures making a claim is quick and easy but ensures the necessary checks on potentially fraudulent claims can be spotted and rectified quickly.”

Concur’s findings of inflated expense reports and other inaccuracies may not come as a surprise to some analysts. Analysis by JPMorgan released last year found that $1 billion of the $186 billion spent on T&E expenses in the U.S. goes to fraudulent activity. Along with T&E firm Certify, JPMorgan researchers also found that businesses lose a medium sum of more than $30,000 each due to fraud on the expense report.

Small businesses can be most susceptible to T&E fraud, analysts revealed.

While expense management fraud is fairly common, the issue may decline as companies integrate expense management technologies that automate data capture from receipts and adherence to preferred vendor policies within the corporation.

A recent report on the growth of expense management software finds a 19.2 percent compound annual growth rate predicted for the space between 2013 and 2018.

“End-to-end expense management solutions automate all components of expense management processes, such as travel booking, expense reporting, employee reimbursement and expense analysis,” explained researchers commenting on the report earlier this year. “End-to-end expense management solutions allow the expense manager to have greater control and reduce reporting errors. In addition, this speeds up the process and improves the operational efficiency of the company.”

Researchers pointed towards the ability of automated T&E tools to not only ensure accuracy, compliance and visibility into employee expensing habits but to save time for both the corporation and its staff.

Data from Concur may suggest that the time-saving benefits of such tools could also be a big factor behind the growth of expense management technology adoption; according to its report, Concur found that 70 percent of employees generate their expense reports during their personal time.