3 ways to secure your business from employee expense fraud

4 minutes
3 ways to secure your business from employee expense fraud
In this article

Business owners often find it difficult to keep track of their employees’ spend. One day, a team member will use the company card to purchase an approved piece of vital software, the next, that very same team member is claiming reimbursement for a “lunch meeting” with a client you didn’t know existed. Although this can often be accidental, It’s critical to keep your business’ payment flow secure to reduce the risk of expense fraud in your growing business.

Expense reimbursement fraud is defined as “any scheme in which an employee makes a claim for reimbursement of fictitious or inflated expenses” (ACFE). This could be anything from claiming pre-work coffees to intentionally changing mileage figures (of which 42% of Australians admit to doing).

And while the more easygoing business owners might find these costs minuscule and allow them to go unchallenged, you might be shocked to learn that expense report fraud amounts to a global loss of $2.9 trillion each year (that’s far more than Apple’s net worth!).

If you’re a business owner who is concerned about your employee spending and wants to be on top of expense control, read on to discover our best practices without the admin overhead.

1. Replace shared corporate cards with dedicated employee cards

Greater visibility and control are imperative to regulating employee spend. After all, how can a company control expenses when they have a shared corporate card being passed around like a footy? Physical shared corporate cards limit the visibility of who is buying what and when. The frequency that these cards are used for “minor purchases” (or worse still, fake claims) is disheartening for accountants, as they are usually far too busy with bigger picture numbers than following up a questionable coffee order (and even if they did, how would they know which employee to follow it up with?).

With corporate credit cards, multiple employee budgets are typically shared on one card. If one or more of your employees aren’t averse to being a little sneaky with their spend, there is a greater risk of blowing your budget and incurring higher debt.

Enter the Airwallex virtual debit card: your ultimate expense control companion. Our debit cards allow you to delegate each employee with their own corporate card whenever they really need it. This allows you to regulate employee card access and spending without the risk they are going to blow the budget on cheeky, personal purchases.

You can easily create and discard new cards to provide to your staff, granting you optimal visibility for each employee, budget and project. What’s more, each transaction is linked to your Airwallex business account, allowing you full comprehension of who spent what, where and when. 

So how does it work? With Airwallex’s employee cardholder feature, you can:

  • Invite your team to Airwallex with their own login and access to track spend

  • Create as many dedicated cards as you need for your team

  • Set the appropriate daily, monthly or card spend limit to stay in budget

  • Freeze or cancel cards in a few clicks if the card is ever compromised

As you can see, virtual debit cards come with a host of intelligent features which protect your business from expense report fraud.

2. Create separate roles to create & approve payments

Having one staff member regulating all employee spending is one of the main reasons companies fall victim to expense reimbursement fraud. 

First, there is limited accountability, as the one team member is tasked with regulating all company spend. This is too great a job for one person and this is where purchases slip under the accounting radar.

Second, when one person is overseeing all company spend, human error can quickly come into play, with regulators making mistakes regarding contact or recipient information. 

Airwallex’s user access management feature allows business owners to delegate approvals to team members, so one person can book payments to suppliers, and another can review and approve the payment. 

For example, you might not have the time to make a particular company purchase, and so you delegate this role to a trusted team member. However, you still want the purchase to be approved by someone from accounts. You can therefore delegate a team member with the ability to create payment and beneficiary details whilst the accountant reviews and approves the payment itself.

Airwallex’s user accent management feature provides the following benefits:

  • Give your team access to Airwallex with the right permissions, so they don’t see the whole account

  • Create dedicated roles that are view-only, create or approve payments and assign them to your employees

  • Start creating and approving payments with peace of mind

3. Review & reconcile expenses monthly in a scalable way

As aforementioned, accountants find it difficult to follow up on employee purchases, particularly when there is no clear paper trail. With so many financial matters to think about including paying staff and budgetary requirements, it’s perfectly understandable that the occasional “client lunch” will slip under the radar.

However, these misleading expenses add up and can cause a company to unnecessarily lose money, especially when the perfect expense management solution exists. 

Having full visibility of your business expenses in a single place is table stakes. With Airwallex, all your local or international employee expenses can be brought into the one, easily viewable location. Combining this feature with delegated purchase roles ensures you and your team have real-time visibility over transactions and business funds.

With your transactions in one place, the next step is to perform an audit of your expenses. Below are common fraudulent employee expense methods to watch out for:

  • Altering the nature of their expense 

  • Inflating the amount spent

  • Making multiple claims on similar amounts

  • Buying from irregular merchants

Airwallex’s Xero integrations system allows business owners and their accounts team to sync all transactions into one place, making purchase regulation a breeze. All your accounts team has to do is set up employee cards as a bank feed and reconcile against invoices and receipts in your Xero account, it’s that easy.

Secure your global expenses with Airwallex Expenses

Want an easier way to draw the line and protect your business from dubious expenses? Many forward-thinking businesses use Airwallex Expenses to save time and improve bookkeeping accuracy.

Issue dedicated Visa cards to your employees in seconds with smart rules on how much they spend, and where they spend it. Get notified for out-of-policy transactions and automatically sync transaction data to your chart of accounts to make month-end reporting a breeze.

To find out more about how Airwallex can help streamline your business expense management and protect you from employee expense fraud, book a demo with one of our product specialists today.

Related article: Why every business needs user access management for purchases

Back to blog


Subscribe for our latest news and updates

Related Posts

CNY vs CNH - Differences between the two Chinese Yuans

CNY vs CNH - Differences between the two Chinese Yuans

3 minutes

Open a multi-currency account built for borderless business

Get started