October 23, 2012
So you're filling out your expense report and you get to that part where you need to submit your receipts. Before you try to blame your co-worker for ordering all the chocolate martinis, know this: According to experts, a lot of people expense things they shouldn't.
"People lie on their expense reports all the time, and I've heard of some getting fired for doing this," said Eric Sikola, founder of ExpenseCloud, a company that helps businesses manage expense reporting online or from a mobile device.
One of the most common offenses, Sikola said, is handing in a receipt that isn't itemized.
"Everybody's done this — you go out to a dinner and you end up having a bunch of drinks with your steak and the bill comes, and you submit the final bill and nothing is itemized," he said. "A company should really have a policy in place that requires itemized receipts so they aren't losing money."
Sikola said receipts can now be scanned from a mobile device, and you can even "tag" those who are at the dinner in the same way that people are "tagged" in Facebook.
"The IRS now allows you to take a picture of your receipt," he said. "There's even a way you can keep track of mileage on your mobile phone through Google maps. Mobile apps are on the rise so this is changing the way companies are keeping track of expenses."
But even as technology evolves, Sikola said employers continue to be surprised by the eye-opening items employees try to sneak into their expense reports.
Here's a list of four extravagant things found on expense reports according to ExpenseCloud:
"We've seen men's clothing, both from Nordstrom or The Men's Warehouse," he said. "But there were also Victoria's Secret receipts added to reports, and that one really blew our mind."
"We see a lot of this and the red flag is when they are really high priced, like $600 or $700, which means they aren't on a contract," he said.
"We've seen large quantities of wine being purchased — in the tens of thousands of dollars," Sikola said. "That was rather extreme."
Visits to strip clubs.
"This is one of the biggest ones," Sikola said. "In fact, we found a correlation between this expense and employees who are from Texas for some reason."
While lying on expense reports isn't likely to stop, Sikola said the new technology can help bosses keep track of what's really happening with their staff.
"We've got a concept that we call 'policy enforcement' which is like creating a playlist in iTunes," he said. "You can create rules to catch certain things based on categories. Perhaps you are only allowed to pay a certain dollar amount on the cell phone...if expenses get too high, the application can flag this. It's a much more immediate way to get data."
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