Business Lunch

Expense claims: festive fiddles and fudges

By: Chris Groome, Commercial Manager, Software Europe
Published: Friday, December 11, 2015 - 12:50 GMT Jump to Comments

Payroll and finance teams must be alert to erroneous staff expenses during the Christmas period. A fair and ‘humanistic’ expense policy can reduce the amount of incorrect expense claims.

Travel and expenses, second only to maintenance and repairs, are the most difficult financial line item for companies to control. Fraudulent staff expense claims are thought to cost businesses millions of pounds each year and, during the festive season, when more staff are travelling and entertaining clients, the opportunity to fraudulently claim, intentionally or inadvertently, increases.

Here are some of the ‘shadiest’ staff expense claims to be aware of:  

• Travel to clients by car

During the festive period there are always more travel expense claims – as sales and account management teams visit clients for lunches and dinners. It is very easy for staff to roundup mileage claims, especially if you’re still relying on paper-based expenses.

You might argue that one mile isn’t worth worrying about, but it can add up to a significant cost over time. I know of one example where an employee of an organisation was over-claiming by just 1.6 miles per journey, but over the course of 12 months it totaled over 600 miles and a lot of money lost.  
I should add that payroll teams should watch for taxi receipts too. Perhaps this is the most well known of fiddles, staff ask for a blank taxi receipt and fill it in themselves. With a blank receipt, it really is very easy to mislead about the cost of a journey.

• Joining the party by train

Many employees will take the train to the office Christmas party or other festive get-togethers, but it can be an opportunity for unscrupulous employees to make the most of lax checks.

We have seen evidence of employees booking train travel through an online system, or directly with the train operator, and using the emailed invoice to make a claim for the expense. However, when they collect their travel tickets at the train station, they use the collection receipt issued to make a second fraudulent claim for the same journey!

• Hidden mulled wine

Most companies enforce a policy where staff can't claim alcohol on expenses. I have, however, spoken to several restaurant staff that tell me they are frequently asked to change the drinks on the receipt to food items. This circumvents the no alcoholic drinks policy. This is a hard claim to spot, but asking staff for copies of receipts and the number of people present at the meal, should help you spot abnormalities.

• Entertaining clients (or your mates)

Entertaining customers is a very important area to watch. We have seen employees attributing their own drinks and food, often substantial sums, as ‘entertainment of clients’, to cover the fact they enjoyed a good night out with a colleague or friends.

A good expenses process should ask for information to support the claim, e.g. number of staff present, number of clients present and the ratio of clients to staff, which will help you to confirm the claim is accurate. I’ve known some concerned organisations even request supporting photos of those present at the meal.

• Accommodation

If you operate a remote workforce and you plan to get together for the office Christmas party, or even if your team are travelling around to meet clients for entertaining purposes, you may find staff accommodation is required. A strict, but fair, policy will make it clear how much can be spent on a room for the night, however, VAT reclaim is another area that is really costing businesses.

Whilst not a ‘scam’, staff may not have a correct VAT receipt that displays VAT breakdown, supplier address and a VAT number. With a paper-based system in place for managing expenses, it's very easy for admin teams to overlook the finer details on receipts and re-claim VAT incorrectly. HMRC is getting very ‘hot' on this at the moment, therefore it should be monitored carefully.         

• How can these expenses issues be prevented?

Firstly, you need a ‘humanistic’ expense policy. By that I mean, a policy which clearly shows what can and cannot be claimed for by staff, but does so in such as way as to be fair. For example, staff based in London will need a much larger taxi allowance than those in Liverpool. Without varying rates based on location, or even job title, some staff will find themselves in breach of policy through no fault of their own.

Using an electronic expense tool can mitigate many of these scams and mistakes. Policy checking, mileage checking, reviewing groups of claims for abnormalities, etc. can all be automated. This will save payroll managers precious time in examining expenses, and gives them more time to focus on other business needs.

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of The Information Daily, its parent company or any associated businesses.

Comments

Latest

Outdated infrastructure and an increasingly fragmented market threaten the future of technology-enabled integrated care.

County Durham voters back devolution in the North-East, Sir Digby Jones considers run for West Midlands mayor…

The recent launch of The Mayoral Tech Manifesto 2016 on London’s digital future, sets out a clear agenda…

The manufacturing industry is currently facing scrutiny from parties concerned for its survival. Far from facing…

Almost a year ago, I made some predictions for what would take place in government and public sector customer…

Sheffield, Warrington and Doncaster announce cuts, Lincolnshire is held to data ransom, fight begins for West…

Working for an education charity delivering numeracy and literacy programmes in primary schools, I’m only…

Northamptonshire County Council recently received the maximum four star rating from Better connected after putting…

Historically, the entrance of new generations into the workplace has caused varying levels of disruption. The…

Following another commendation for digital services, Surrey County Council's Web and Digital Services Manager,…

We cannot carry on spinning the roulette wheel that is cyber security, knowing that the “castle and moat”…

This week David Cameron wades into row over £69m of cuts planned by Oxfordshire CC; Stoke on Trent plans…