It takes money to make money but any successful company expects to see a return on investment (ROI) for the expenses their employees incur. Inevitably though, some expense claims stretch the boundaries of legitimate business. We asked around for the expense claims that truly confound common sense and you can see our top ten listed below or view as an infographic.
1. The High Flyer
“My boss flew first class for two weeks without any business meetings booked in and expensed it to the company. The finance director was furious at me for booking the travel, but the company paid for it anyway.”
2. The Lazy Commuter
“My boss lived ten minutes away from work, but he expensed his cab journey to and from the office every day.”
3. An Expensive Affair
“An employee was having an affair with a customer and they were both submitting their expenses as business-related.”
4. The Strip Club Aficionado
“An individual was frequenting strip clubs claiming it was client entertainment. Turns out he was on his own but using a company credit card.”
5. The Imaginary Traveller
“A colleague claimed mileage for trips never made. All business was done over the phone!”
6. The Gambler
“There was one guy who withdrew hundreds from the corporate Amex card at a pub frequently – he was gambling.”
7. The John
“A (married) man spent hundreds on the corporate credit card at a company with a generic name. I later found out it was a brothel.”
8. Crisscross
“I had a colleague who would claim his expenses twice by getting two different managers to sign them off!”
9. The Musician’s Father
“My old boss was trying to put the drum kit he’d bought his son through as a company expense in addition to the Breitling watch he’d just bought…”
10. The Technology Snob
“Someone senior in my business didn’t like the standard phones issued to employees so he bought an Apple phone for himself and tried to put it through expenses.”
Unfortunately, many ridiculous expense claims like these slip under the radar, but even when they are identified, companies don’t always get reimbursed and the situation is often unpleasant with offending individuals asked to pay back the money or face legal action. So how can companies combat what is fundamentally fraud and reduce the risk to their businesses? We spoke to four leading experts to discover the challenges expenses like these can create and how to handle them.
Sometimes expenses are written off…
Debbie Gross, Speaker, and Author of “The Office Rockstar Playbook” and former Chief Executive Assistant to the CEO of Cisco had a few bizarre expense tales to tell us…
“I’ve heard about Gucci and Louis Vuitton purses noted as gifts, and a three day trip to Vegas with a limo even though there was no business there. Those making the claims were ultimately told they would have to pay the company back or be arrested.”
But sometimes it’s impossible to rebuke the expense claim offenders if they’ve already left the company. Debbie saw a claim for a $9k Monte Blanc pen and padfolio. “The company never got to the bottom of that one and ultimately the expense had to be written off.”
$9k is a very expensive write off for a business, but it’s not just the claim that is costly. There’s the time it takes to get to the bottom of it detracting away from revenue-generating work.
Better transparency early on can mitigate dubious expenses…
Ben Eubanks, Principal Analyst at Lighthouse Research & Advisory had an employee once that was submitting double expenses for trips.
“When we looked into the issue, we realised he was having an affair with a customer and submitting both of their expenses for reimbursement because they were purported to be business-related. The employee is no longer with the company, obviously, but it triggered all kinds of chaos on the financial side to understand what had been reimbursed and what was deemed fraudulent. Because of the circumstances, the company opted to forego recovering the expenses.
Better insight and transparency into the expenses would have helped to uncover this issue (and other issues that are frankly less overt and strange). Humans are great at some tasks but evaluating a variety of expenses on an expense report for accuracy and validity is tough to do frankly. Having the right technology systems to hand can help to create better visibility and mitigate any issues with intentional or unintentional confusion surrounding employee expenses.”
But some ridiculous expenses might not be as odd as you think…
And let’s not forget that some ‘far out’ expenses might not be as outrageous as they first appear.
The eruptions of the Icelandic volcano Eyjafjallajökull, although relatively small for volcanic eruptions, caused enormous disruption to air travel across western and northern Europe over an initial period of six days in April 2010. Tim Hughes, Co-Founder and CEO Digital Leadership Associates, had salespeople and consultants stuck right across Europe as all flights were cancelled. Chaos ensued as trains became over-crowded and hire car companies ran out of cars. “We had one consultant who was in Warsaw, Poland who drove to Brussels to get the Eurostar back to London and had to expense the entire trip. I’m pleased to say that common sense prevailed at a corporation level and the ‘normal’ rules were placed on hold.”
Ensuring that you have a level of flexibility built into your corporate expenses and travel regulations will protect the overall wellbeing, including financial, of your business travellers from extreme situations.
What do you know about your workforce’s expenses?
“We’ve all seen the odd and downright inappropriate expenses that some try (and occasionally succeed) to get through the system” (David A.J. Axson Global Lead of CFO Strategies at Accenture Strategy).
But do you know whether the expenses you are processing are worth the investment or not?
“Most companies have increasing amounts of detail on what is being spent (e.g. £125 on hotel and £13.76 on a taxi etc.), but in many cases, insight into why the money was spent is highly limited. By using travel management technology that provides full transparency over costs and the return generated from them, businesses can not only assess whether expenses are legitimate or not but whether spend directly contributes to the company’s bottom line,” David A.J. Axson.
Data transparency is key
Travel and expense management technologies that leverage AI such as SalesTrip can help your business to detect and flag duplicate and dubious claims, improving efficiency and ensuring compliance.
It also saves time for admin, HR and finance teams as the everyday and mundane expenses that make up the majority of claims can be reimbursed almost immediately whilst the more unusual ones are flagged up for attention.
Most importantly, companies that have a deeper insight into their data to forecast business travel expenses, will be able to put an end to illogical or even ambitious spending that does not contribute a decent return to the company.
What’s more, SalesTrip enables travellers to submit claims alongside tangible business outcomes, empowering employees to make better decisions about spending money – helping eradicate these ridiculous expense claims once and for all.
