Prevent employee expense fraud: 5 steps for finance leaders

Fraud is an unavoidable risk for organisations with employees. The Association of Certified Fraud Examiners (ACFE) estimates that businesses lose roughly 5% of revenue to fraud annually, with the median loss per case totalling £109,000¹. In uncertain times - rising costs, hybrid work, and more sophisticated fraud techniques - companies must strengthen controls around travel and expense (T&E) spend. This blog and associated guide shows how to build a future-ready fraud prevention and detection programme using policy, process, reporting and AI-driven tools. 

Why spend control matters now 

Nearly 70% of businesses report increases in fraud losses in recent years². Hybrid and remote work means less in-person oversight and more expense reports to review, increasing the chance that fraudulent or non-compliant spend slips through. Controlling spend isn’t just about reducing costs; it’s about protecting reputation, preserving trust, and preventing material losses. 

Employee expense fraud quietly drains revenue and undermines trust, but it’s preventable with a structured, proactive approach. This guide shows how to stop and detect expense reimbursement fraud using four practical steps: design adaptive expense policies, deploy the right technology and processes, monitor and analyse spend, and benchmark compliance against industry standards. 

You’ll learn how evolving policies keep pace with business change, how expense management software and approval workflows tighten controls, and how targeted reporting and monitoring surface anomalies fast. Benchmarking against industry standards helps measure compliance, prioritise risks, and demonstrate audit-ready governance. Together, these steps reduce fraud risk, speed up reimbursements, and create an auditable trail for investigations. 

Follow the step-by-step recommendations in this post to strengthen controls, improve visibility into employee spend, and protect your bottom line. 

Step 1 - Design T&E policies that evolve with your business 

A static travel and expense policy is a vulnerability. Regularly review and update your policy to reflect: 

• What is and isn’t an acceptable expense 
• Protocols for handling out-of-policy spend 
• Requirements for e-receipts above defined thresholds 
• Rules for remote and hybrid employees 
• Ask practical questions during reviews: How often is the policy updated? Are tools available to detect non-compliance before reimbursement? Is the data captured sufficient to evaluate risk? 

 

Create a Best-Practices Expense Policy

Download our free expert-led whitepaper to build a clear T&E policy that boosts visibility, speeds approvals and cuts out-of-policy spend - complete with a ready-to-use template and real examples.

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Step 2 - Put the right technology and processes in place 

Manual reviews can’t scale. Use integrated technology to enforce policy and automate checks: 

• Capture credit card data directly into expense reports to reduce manual entry errors 
• Require e-receipts above a threshold and attach route/mileage data where relevant 
• Implement automated audit rules and approval flowcharts to assign accountability 
• Use impartial external audits periodically to validate internal controls 

Step 3 - Report on, monitor and analyse spend 

Data-driven monitoring accelerates detection and helps prioritise investigations. 

• Identify which teams should be involved (finance, travel, HR, legal, compliance, audit) 
• Use reports to highlight trends across spend categories and pinpoint high-risk areas 
• Conduct periodic reviews to catch duplicate items, unauthorised attendees on meals, expenses near receipt limits, and other common schemes 

Step 4 - Benchmark compliance against industry standards 

Compare receipt attachment rates, proportion of cash transactions, frequency of high-risk expense types, and mileage patterns against industry benchmarks. Benchmarking helps you focus controls where they’ll be most effective. 

How AI and automated audits change the game

AI and machine learning can efficiently review 100% of expense reports and surface the exceptions that need human attention. Combining AI with certified auditors (a hybrid “human + AI” model) reduces false positives, shortens investigation times, and scales audits across more reports. Automated audits have been shown to reduce the cost of mistakes in expense reports considerably, enabling organisations to detect fraud earlier and more reliably. 

Solutions that help detect expense fraud: 

Integrated tools can prevent and detect fraud as spending happens. Examples include: 

• Intelligent Audit: AI scans expense charges and flags exceptions; certified human auditors review unresolved items. 
• Concur Detect by Oversight: Uses pattern analysis and end-to-end auditing to review every transaction before reimbursement. 

Practical next steps for finance leaders 

• Update your policy and communicate changes organisation-wide. 
• Implement automated rules for receipts, approvals, and credit card data integration. 
• Adopt AI-driven audits or hybrid audit models to review all expense reports. 
• Set up reporting dashboards and periodic reviews; involve the right stakeholders. 
• Benchmark performance and refine controls over time. 

Fraud and non-compliant spending are distinct but overlapping risks. By evolving policies, adopting the right technology, using data-driven reporting, and leveraging AI-enabled audits (or platforms like SAP Concur), organisations can reduce losses, deter fraud, and be better prepared for the unexpected. 

Speak to an expert today to see how SAP Concur can help you detect and prevent employee expense fraud with greater visibility and control. 

How can SAP Concur Expense automatically flag suspicious patterns? 

With Concur, your company can implement AI-driven controls to prevent, detect, and mitigate financial losses from accidental errors or fraudulent activity. By combining AI and human excellence, Intelligent Audit scans charges on expense reports, calling out exceptions and flagging those that are potentially falsified or unverifiable. Certified and highly trained human auditors from around the globe then double-check charges that AI could not validate to scan for signs of deepfakes. With intelligent trend and pattern analysis, plus end-to-end expense audit processes, Concur Detect gives you the visibility and accuracy you need to be confident in every transaction. Expense reports are reviewed against receipts before reimbursement happens, so it’s easier to identify anomalies and check for payment fraud. 

How do I create expense policies that prevent fraud without being restrictive?

Your travel and expense policy should not remain static; it should evolve alongside your organisation. Ask yourself these questions when reviewing your policy: 

• How often do you update your travel and expense policy? 
• Does it include what is and isn’t an acceptable expense? 
• Is there a defined protocol for handling out-of-policy or non-compliant spending? 
• Do you have employees working from home regularly? 
• Do you know if you have the right tools in place to detect fraud and non-compliant spend before it happens? 
• Are you capturing all the necessary data to evaluate compliance and fraud risk? 
• What advanced reporting helps prevent systematic expense fraud? 

With access to historical spend data, your business can forecast future spend and identify exception-based scenarios, such as mileage padding. Analytics can also spot anomalies in spend data, including outlier transactions and repeated instances of suspicious employee behaviour over time. 

¹ ACFE, “Occupational Fraud 2024: A Report to the Nations,” 2024 

² Experian, “Fraud Trends 2024,” 2024