A quarter of UK businesses operate without a policy outlining what employees can and cannot claim on expenses, a study finds.
Of the remaining three quarters (75 per cent) that do have an expenses policy in place, over a quarter (28 per cent) do not strictly enforce it, according to research by Concur.
The survey, which polled 200 individuals charged with handling expense claims within their organisation, demonstrates the extent to which UK businesses are still vulnerable to fraudulent expense claims, with only a third of expense processors rigorously checking claims against their corporate policy.
The data shows that clear, formal guidelines to protect against expense fraud are missing from the majority of organisations, putting them in danger of leaking cash and running into compliance issues.
Isabel Montesdeoca, general manager and senior vice president for Concur in EMEA says, ‘The vast majority of all employees are honest and transparent when it comes to submitting claims. However, there is a small group who will always try to take advantage of the system by claiming illegitimate expenses.
‘The best way for any business to avoid falling victim to expense fraud is to establish a clear, public, and well-enforced corporate policy.’
Small businesses – often the companies that have the tightest cash flow – are the most susceptible to expense fraud, with only 27 per cent checking every receipt submitted by their employees.
Montesdeoca continues, ‘Finance teams are typically under enormous pressure to deliver a wide range of demanding tasks on a day-to-day basis, of which expense management is just one. For this reason, the vast majority are unable to invest the time needed to fully enforce their company’s policy and ensure all expenses are legitimate.’
The study also reveals that the UK workforce is losing more than £330 million per year in unclaimed expenses, more than the amount of money the government recently invested in the country’s new Business Bank.
Furthermore, nearly a third (32 per cent) of UK employees that claim expenses regularly sacrifice at least £60 per year in unclaimed expenses, with nearly one in five (17 per cent) losing at least £120.