How Zetadocs Expenses can help combat fraudulent claims

Ensure you don't fall victim to expenses fraud

Following our recent post detailing some common types of expenses fraud, this article explains how Zetadocs Expenses can complement your company’s expenses policy, boost your internal controls and consequently alleviate the threat of fraudulent claims.

• Policy checks – the compliance aspect of your expenses policy can be implemented within the software. For example, if you have a normal limit of £50 for a taxi ride, you might set this within the software to give an amber warning and then add a red line limit of £100.  A £55 claim would get flagged to the line manager and finance team as being above the normal £50 limit, and the user wouldn’t even be able to submit a taxi expense above the £100 absolute maximum.

• Audit trail – for each expense report, there is an audit trail which dates and time stamps the approval process at each of the following steps:
1. Submission by user
2. Approval by line manager
3. Processing and finalisation by the finance department
4. Export to Microsoft Dynamics NAV

This enables your HR or finance departments to see each step along the chain to ensure that expense claims are being approved by the correct people and that your expenses policy is being adhered to. The presence of a reliable and easy to follow audit trail is an indicator of strong internal controls.

• Roles – Segregation of duties is a fundamental concept which involves having more than one person required to complete a task. It is key to strengthening your company’s internal control system and lowering the risk of fraud. It is important that employees are not allowed to submit and approve their own claims. In 2012, a Personal Assistant at the UK Ministry of Defence fraudulently claimed £45,000 in expenses by taking advantage of a lax accounting system that enabled her to sign off her own expense claims. This would not have been possible with software such as Zetadocs Expenses it defines separate roles which allow users to undertake distinct activities. Click here to learn what these roles are. These different roles provide segregation of duties and can prevent issues such as submitters approving their own expenses, allowing only those with the relevant permissions such as line managers, to approve their team’s expense claims.
 
• Mileage rates – companies can set the claimable mileage rates to be those specified in their expenses policy. This will prevent employees from adding their own mileage rates and reduce the likelihood of falsified claims based on the rate at which they are reimbursed.

• Expenses review – Zetadocs Expenses stores all expense claims and supporting documentation such as receipts within the software. This makes it simple to conduct a review of previously submitted expense claims on screen; far quicker than a paper-based system where you have to dig out expense claims and paper receipts, which may be filed away in folders or even already sent off site. Completed expense reports can be exported to Excel for detailed analysis.

Understandably, businesses need to have trust in their employees, and the majority of employees are scrupulously honest and dependable in the workplace. However, from time to time there will be dishonest employees that slip through the net and collectively they cost UK companies £100M a year when it comes to travel and subsistence fraud. Expenses Management software, like Zetadocs Expenses, together with a clear expenses policy, can play a key part in alleviating these losses, provide peace of mind to employers and strengthen internal controls so that it becomes harder for dishonest actions to go undetected.