Mileage fraud is one of the most common frauds happening in the industry. Whenever employees use personal vehicles for business purposes – mileage fraud happens. According to a global study, around 47% of business travelers commit mileage fraud by falsifying or exaggerating their mileage costs. Rounding up expense claims have become the most common form of fraud committed by employees. And, these expenses are difficult to get identified.
Even a few extra miles will cost you more when multiplied across a company, becoming a serious drain on company resources. This would automatically increase the risk of compliance breaches.
The following are some of the mileage fraud strategies used besides rounding up values:
Claiming for expenses that don’t really happen is termed as falsification. For the mileage claims that are legitimate, the reimbursement process can be done easily.
Rounding up values is the most common example of exaggerated claims. This is where a journey has taken place, but the claimants exaggerate the actual distance.
Legitimate mileage claims are offset against non-work related claims in a journey. Employees may travel to various non-work related places while on a business trip, and they will claim all these expenses as work-related.
This is where employees file expense reports with mileage claims separately when multiple employees share a car journey. These methods proved costly as they rely on inefficient methods of managing travel expenses. By verifying the legitimacy of the information, finance departments can stem the mileage fraud.
Fortunately, there is a way to eliminate mileage fraud with automation. Cloud-based expense reporting solutions complemented with smartphone apps can control the way mileage expenses are claimed. A solution such as SutiExpense provides corporate travelers a smartphone app to record and track the distance employees have traveled while on a business trip. The solution uses the GPS feature to track the exact route that the employees take, and automatically calculates the mileage distance to populate the expense report. This means you no longer have the hassle of manually submitting claims with accurate information, as you are automatically getting it populated into the expense report.
Ultimately, you do not need to take control of mileage costs. An automated solution gives finance department the data required to check the validity of each trip employee has taken. This kind of business trip includes non-work related travel and can be easily spotted. With data being managed digitally, the system allows finance departments to start tracking and monitoring costs in a way that was previously not possible. With integrated expense report software, you can easily filter the data and identify discrepancies.
With companies losing some percent of the revenue as mileage fraud, considering SutiExpense to combat this can help minimize risks.