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“If we give more employees access to company money, won’t we increase the odds of getting ripped off on business expenses?”

That’s something we hear a bit from decision-makers in companies where work expenses are still run in an old-fashioned way. It’s a concern we understand and one we want to talk about.

Because one of the myths around tightly-controlled expense management is that it’s inherently more secure.

The term “expense fraud” might send shivers down the spines of CFOs… in most cases though, it’s not some masterplan to rip off an employer.

Only, it isn’t. If it was, business expense fraud probably wouldn’t be costing British companies around £2bn a year.

Business expenses: What we mean by “the old-fashioned way”

Typically, expenses have been managed in a centralised, manual fashion, meaning that all business spending originates from a single point.

Think of the CEO’s company card that gets passed around from employee to employee.

Or in other companies, think of the single employee who’s designated as the point of contact for all purchases.

Not all heroes wear capes, some just manage everyone else’s travel bookings.

How is expense fraud happening?

The term “expense fraud” might be enough to send shivers down the spines of CFOs.

In most cases though, it’s not some long-term masterplan to rip off an employer with gazillions in invented costs.

It can also be staff not realising something isn’t a valid business spend.

Or just being opportunistic.

Why is expense fraud happening?

One in ten employees in the UK say they submit incorrect claims “all the time”, which gives you some clue as to the size of the issue.

An interesting piece in Forbes recently listed some reasons behind workers “cheating” their expense reports.

The scope it suggests is what stands out at first.

Fraud could be:

The supervisor overspending to stay popular with their team

The business traveller who feels micro-managed and makes up for it with exaggerated mileage

The new hire annoyed at the CEO’s luxury hotel room, who decides to upgrade themselves

Too many of these scenarios are made possible by traditional ways of managing spending.

The scope of oversight required in old-fashioned expense systems, coupled with the lack of real-time data, means even the savviest financial brain would struggle to spot all of these spending oddities.

And let’s say they did spot them all. How do you start to police questionable transactions if everyone’s using the same card?

Changing the way your business spends could make it safer

Decentralised spending through a tool like Pleo changes the game.

With Pleo, multiple employees (maybe even all of them) have access to company cards. Workers at all levels can make business purchases when necessary, without needing sign-off from multiple rungs of management.

So, back to where we began:

“If we give more employees access to company money, won’t we increase the odds of getting ripped off on business expenses?”

There’s a couple of reasons why, with Pleo, the answer is no.

The first is spending limits, set individually on each card. You don’t need to trust a new member of staff with the same limit as you offer an established head of department.

People are accountable for the money spent on their card and their managers are accountable for making sure it’s in line. It works both ways and benefits both.

The real-time tracking of spending is also going to help. Rather than having to wait until the end of the month for a bank statement, your financial team can immediately detect anything that doesn’t look right.

If they do spot something that needs investigation, a Pleo card can be frozen.

A business expenses solution that benefits boss and worker

But it’s not just the product features of Pleo that make it so much easier to identify possible fraud issues.

It’s about the trust you’re giving an employee when you give them their own Pleo card.

You’re taking away the headaches and antagonism that define the old-fashioned way of doing business expenses.

Transparency and accountability are big concepts, absolutely.

But they’re also a hell of a lot more fun than trying to figure out who’s been taking the company card to Happy Hour for the past month.

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Neil Brennan, Pleo

Neil Brennan

Content lead

Journalist with the BBC, LBC and others for a decade or so. Now doing words for Pleo. Spot a typo? I'm all eras.