Unusual Employee Expenses
Reviewing and signing off on employee expenses can be funny sometimes, but not in a way that’s actually humorous. In fact, when it comes to employee expense reports, some managers will want to know every detail, while others won’t bat an eye.
Unusual Employee Expenses and Culture
In plenty of professional environments, culture drives the way that managers, employees, and accounting think about, and handle expenses. In some cases, it can be as if an unwritten cultural code dictates the way that employees can circumvent certain expense policies, as long as they’re not blatant about it doing it too often—or too loudly. Still, even in cultures where people might be more laid back about following the expense policy, no one wants to run into situations where employees are openly taking advantage of things. Consider a couple of hypothetical offenses:
- Your organization reimburses for up to one office plant per workstation. You notice that certain employees are constantly taking advantage of this unusual expense. However, whenever you pass their workstation, all you see is the same dying spider plant that’s been there for years. They must have quite a collection of plants at home. Is the company paying for them?
- You task an employee to purchase non-alcoholic beverages for the upcoming company mixer. A few weeks later, when they submit their expense report and receipts, you find beer and wine among the line items. Was there some miscommunication?
If you’ve been around expense reports long enough, you probably have your own stories to tell. Some might even prompt a chuckle. Still, laughter isn’t necessarily a good thing in these cases. In fact, in the eyes of some organizations, these situations aren’t just un-funny—they represent employee theft. How can you avoid illegitimate expenses before they happen? Discover three tips below.
Employee theft in any form is no laughing matter. With ExpenseWire as your go-to expense management software, you can tighten your policies, and simplify your expense process in order to avoid expense theft before it happens. Schedule a demo, and learn more today.
Get Serious About Employee Expenses
How come funny expenses aren’t actually funny? For one, they steal money from your organization when they slip below the radar. But that’s not all:
- Most of your employees are honest. Illegitimate expenses can force your company to make strict policy changes that affect everyone, even people who have never done anything wrong.
- They can make it difficult for people who are honest about expenses to get their reimbursements in a timely fashion.
- They can create an air of suspicion and distrust between managers and employee groups.
Organizations of all sizes are dealing with a spike in employee theft. At the end of the day, employee expense fraud is never humorous. And, while managers don’t want to worry about whether their workers are trying to slip a fast one by them, it can happen. Whether you have 50 or 500 employees, expense reports are one of the easiest ways for employees to slip in an expense that isn’t business-related, or take advantage of gray areas in your reimbursement policy.
- Sometimes, it is a matter of employees not completely knowing, understanding, or paying attention to your policy.
- In some cases, managers and HR aren’t communicating the policy succinctly, especially with new hires. Similar to what we wrote above, this could be a systemic issue related to an organization’s culture.
- And, there are plenty of cases where the policies in the employee handbook have become outdated, or were never written that well to begin with.
If your organization is using a manual, or paper-heavy expense reimbursement process, it can make it even more difficult to catch an illegitimate expense. After all, when managers have to comb through every expense report, they are bound to miss things. Here are three tips that can help curtail illegitimate expenses before they happen:
1. Revisit the way you’re communicating your policy and expense reporting process.
Employees need to understand your organization’s expense policies. Otherwise, innocent mistakes—along with intentional fraud—are more likely to happen. Therefore, it’s important to communicate with them right away about your expense policy, especially when they’re a new hire, or if they’ve moved into a new position that involves expense reporting.
- When employees aren’t sure about a policy, how will they know if they’re pushing the boundaries of your policy, or taking advantage of a gray area?
- They may feel like their best defense is a shrug, followed by the promise to do better next time.
In your communication, explain how to break up parts of a purchase in cases where they are buying things for work, and things for personal use, at the same time.
2. Seek clarity when an unusual employee expense comes up.
Not every illegitimate expense translates to intentional employee fraud. Before you jump to conclusions, check in with employees, and find out what might be going on.
- There are plenty of cases when employees lack clarity about the expense policy. Perhaps the policy has recently changed.
- Or, as we wrote earlier, it could be a situation where certain policies have never been clearly communicated.
- A conversation can also clear up issues where an expense is for work, but comes across as being personal.
In other words, trust the power of clarity and communication, especially when the issue actually comes down to an innocent mistake, rather than someone intentionally trying to sidestep the rules. These types of conversations can empower employees, and even the organization as a whole, to revisit policies, and answer questions or issues that have been coming up in other departments.
3. Choose software that can keep inappropriate expenses off of expense reports.
Rather than wishing for employee theft to go away on its own, your organization can put systems in place to help prevent it from happening. That includes employee theft that happens on expense reports. If you’re still using a manual process, an employee expense management software like ExpenseWire can be key.
- Let’s say you have a solid expense policy. You might even have strong FAQs meant to help employees understand various limits. What good are the FAQs if employees don’t know how to access them at the time of a purchase, or when they’re completing their expense reports?
ExpenseWire is built to make it easier for employees to access information about expense limits and restrictions in the moment of their purchases.
- The software will send alerts as employees approach budget limits.
- It will also send alerts in the event an employee attempts to claim a purchase that goes beyond your policy.
Every organization wants employees to be good citizens. When an employee takes advantage of loopholes in expense reporting, it might help them personally, but it’s detrimental to the organization. By closing the gaps in your expense policy, you make it easier for employees to be part of the solution, not contributing to potential problems.
ExpenseWire helps you prevent illegitimate expenses before they happen, and gives employees new ways to manage work-related expenses with a cloud-based, mobile-friendly solution. Contact ExpenseWire to learn more.