Any employee who travels on official business has to report all his expenses to claim them later. These expense reports list down all the expenses incurred by the employee in the course of his travel and each expense has to be backed by its receipt as proof. Receipt audit is the act of cross-checking an employee’s expense report data with the expense receipts provided by the same employee to check for any discrepancies or inconsistencies. If none are found, then the expense report can be processed and the employee can be reimbursed. However, if any discrepancies exist, the reason for these could be found out and the appropriate action be taken.
Why do these discrepancies exist?
For a number of reasons, not all of which are nefarious. These discrepancies could be the result of mistakes or a lack of proper understanding of the organization’s travel and expense policy. And of course, the more common reason – reimbursement fraud. If there is scope for it, employees hike up the amount to be reimbursed and submit their expense claims. We’ve talked about reimbursement fraud in a post before; receipt audit is one way to find and eliminate it.
Why do you need it?
As mentioned earlier, receipt audit is one way to find and eliminate expense fraud. After all, if the employees know that their expense receipts and claims are being thoroughly verified, they would refrain from making fraudulent claims.
Also, reimbursing claims without verifying them can cause the firm to lose untold number of dollars every year. Therefore it is a good idea to audit these claims and ask employees to resubmit the claims once they’ve corrected the mistakes. It also serves to ensure that all the employees are following the travel and expense policy while making expenses and claiming for them later.
We’ll see more about this later in the next post. To know more about expense and receipt management, click here.