Today's New York Times claims that "While there are no hard figures on the costs of travel expense fraud to American companies and organizations, estimates range as high as billions of dollars a year. A report last year by the Inc. Business Owners Council, an organization of family business owners, found that business fraud, over all, increased by two-thirds from 2006 to 2009." And while there are many ways to dictate and monitor travel expenses, eliminating fraud begins with demanding integrity from everyone at all levels of the organization.
Padding expense reports is stealing whether it involves bogus cab receipts, downgrading airline tickets or simply claiming personal entertainment as a business expense. So why, as The Times headline states, is "Fudging Travel Expenses ...Widespread and on the Rise"? To wit, "One of the most highly publicized cases involved Mark V. Hurd, who was ousted as chief executive of Hewlett-Packard in August for falsifying travel expense reports to cover as much as $75,000 in first-class travel and luxury hotels for a reality show contestant turned marketing consultant who traveled with him." The article is also replete with various rationales that individuals use to convince themselves that it's okay to pay themselves through such nefarious means, but it is still stealing.
The most sophisticated T&E software will not preclude fraud. It's a personality flaw with a huge price tag for all parties concerned and requires a policy of zero tolerance. Not only does such fraud gnaw away at profits, any employee who lies and cheats their employer will also be unfocused in their job performance and highly likely to steal in other ways when opportunities exist. The NYT quotes Craig Fearon, senior product director at CyberShift, an employee expense software firm: "There's an old saying in sales, 'If you can't sell, drive.' You'll get reimbursed for the mileage."
The place to start is with corporate policy that clearly states that anyone who defrauds the company in anyway -- including but not limited to falsifying expense reports -- will be viewed at risk to be dishonest in executing all their responsibilities and summarily dismissed. And if you believe that people in positions such as VP of Sales warrant a different standard, just imagine the effect their behavior has on the sales force.