Maverick spending may not seem like such a big deal — rounding up a dollar here and there on the expense report can’t add up to much, can it?
It can, actually, according to new research from JPMorgan and a new infographic by travel and expense management firm Certify.
According to analysts, businesses in the U.S. will spend $186 billion on T&E expenses this year alone. A whopping $1 billion of that will be due to fraud. Certify added that businesses in 2014 lost a median sum of more than $30,000 each because of expense report fraud. SMEs, it said, are even more susceptible to expense report losses, with companies of less than 100 employees experiencing a 28 percent increase in their median financial losses to T&E fraud than their larger counterparts.
Certify’s infographic identifies four types of fraud that can occur from travel and expense reports: mischaracterized expenses, fictitious expenses, overstated expenses and multiple reimbursements.
Reports in Accounting Today said Certify identified several shortfalls among businesses that could be leading to their financial losses because of T&E management errors. For example, analysis found that the fifth largest category cited on the expense sheet is uncategorized, “miscellaneous” spending, making it easier for an employee to request reimbursement for unknown costs. Researchers estimate that more than 6 percent of expense transactions are non-compliant.
An impressive 70 percent reduction in non-compliant transactions, however, can result in businesses more closely monitoring compliance in their T&E policies, researchers added.