Here’s the Top 10:
1. DUPLICATE CHARGES: CORPORATE CARD AND OUT-OF-POCKET
Ensure that all charges claimed by an employee are valid and not repeated. Identify all instances where an employee has charged the same amount on the same day where one transaction was a corporate card expense and the other was an out-of-pocket reimbursable expense.
2. SUSPICIOUS KEYWORD MATCH
Validate that all transactions are for authorised purposes. Identify all T&E transactions that contain words from the Restricted Word list anywhere in the merchant name, transaction description or business purpose field that indicates a potentially unauthorised purchase.
3. ROUND AMOUNTS
Detect potential fraud and abuse for unauthorised gift cards, cash advances, or excessive tips and identify T&E transactions that are evenly divisible by <<round amount divisor>>.
4. EXCESSIVE HIGH-RISK EXPENSE CATEGORIES
Detect potential fraud and abuse of expense types that require less documentation. Identify employees who have transactions in High-Risk expense categories that exceeded thresholds for either the count or total amount. Common High-Risk expense categories: tips, miscellaneous, baggage fees, etc.
5. FUEL WITHOUT RENTAL
Detect potential fraud and abuse of employees submitting personal fuel expenses. Identify any expenses in the fuel category that is not accompanied by a car rental expense in that category.
6. GROUP MEAL AMOUNT PER ATTENDEE
Ensure that all attendees are properly documented and prevent excessive group meal expenses. For each expense identified as a group meal, calculate the amount per attendee, and report group meals where the amount per attendee is greater than a specified threshold.
7. UNUSUAL MERCHANT CATEGORY CODES (MCC)
Detect potential fraud or abuse by identifying expenses with Merchant Category Codes (MCC) whose frequency in the population is less than a threshold (by percentage), but total or greater than another threshold.
8. CHARGES MADE ON HOLIDAYS
Identify expenses with transaction dates falling either during an employee’s personal holiday or a bank holiday. Alternatively, a test could be made to test for expenses made within X days of an employee’s termination to confirm validity.
9. EXPENSES PER HOTEL RATIO
To detect potential circumvention of corporate purchasing controls, calculate employees’ expense per hotel ratio, reporting employees with excessively high ratios.
10. MEALS OVER THRESHOLD
To detect potential mis-categorisation of group meals as an individual meal, identify meals where the amount is greater than a threshold. This test may yield a lot of transactional results and one approach would be to highlight worst offending employees by either count or aggregate exception amount.
Analysis of T&E not only supports compliance, but can leads to direct improvements in process efficiency and generate considerable value to the business through cash optimisation.