How Do I Stop my Employees from Stealing?

One of the most common types of fraud comes from expense reimbursement schemes.


Have you ever heard a story about an employee turning in receipts for a dinner with their wife, instead of a client? What about turning in a travel receipt twice?


This might sound benign or like small potatoes, but over months or even years, these fraudulent expenses can really add up!  In fact, according to a 2016 report by the ACFE, these incidents account for 14% of all asset misappropriation fraud schemes.


The businesses that are most at risk have less than 100 employees, since they have a limited budget for fraud prevention, and tend to have more “trust” in their employees.


How can a business protect themselves?


According to CGMA Magazine, businesses can use the following methods to prevent or detect fraud.

  • Travel and Expenses Policy – Businesses should implement a formal written policy and distribute the policy to all employees. The policy should be used by everyone in the business, regardless of title or position.
  • Meaningful Approvals – The approval department needs to have specific details to check for and why, including dates and receipts.
  • Cost Monitoring – Best practice to discourage fraud is to implement two controls at different stages of the expense reimbursement process. This can be done by checking the receipt when it is reported, and then again with a monthly analysis to spot any unusual trends. There is expense management software that can help with this task.
  • Lead by Example – Controls are meaningless if the management team doesn’t follow the procedures in place. If you are serious about preventing fraud, don’t say one thing, but do another.


For more information about this subject, follow this link to an in depth article from CGMA Magazine.