Expense fraud or misuse happens when an expense or reimbursement claim↗ is false, inflated, duplicated, or non-compliant with policy, whether intentional or accidental. This risk often grows as companies scale but continue to use manual finance processes. Inaccuracies are more likely to slip through, draining budgets and creating compliance risks.
This article explains what expense fraud is, the most common types to watch for, and practical ways to prevent it. You’ll also learn how expense management software improves spending visibility and how to prevent expense fraud with greater confidence.
Expense fraud: Manual processes vs. automated systems
Over time, expense fraud drains profit, creates compliance risks, and slows business growth. These issues compound when companies rely on manual processes across separate systems. As claim volume grows, oversight weakens, making inaccurate and fraudulent expenses harder to detect.
Modern expense management↗ software minimses these gaps by centralising data and enforcing consistent controls. It standardises submissions, applies preset rules, and creates greater spend visibility↗ across reimbursements and transactions.
Common types of expense fraud
Expense fraud shows up in a few familiar ways, even if each case looks different. These are the types teams should watch for.
Mischaracterised expenses
This happens when personal spending is framed as work related. This might include a meal outside of a workday, a subscription used on personal time, or trip add-ons unrelated to the purpose of the trip. Most often, these claims blend in with regular submissions when policies aren’t in place.
Moss helps reduce overpayment risk by centralising spend documentation and enforcing receipt collection rules. For example, admins can configure a Missing Receipt Policy that checks hourly and can automatically block cards when users exceed a missing-receipt threshold.
Falsified entries
Falsified claims show up when employees turn in fake or altered expense requests. This could involve anything from submitting fraudulent receipts to changing invoice details after approval.
In manual setups, teams often store receipts, invoice details, and approval notes in separate places. This increases the risk of unauthorised changes. If someone has edit access to a spreadsheet tracking reimbursement information, for example, they can easily alter details. When this information lives in one centralised system, admins can restrict who can edit records, making irregular formatting and discrepancies easier to identify.
Inflated amounts
These claims are tied to real purchases, but the numbers don’t match the original receipts. Someone might round up costs or add small extras. Clear expense data allows finance teams to spot discrepancies before they escalate.
Duplicate submissions
Multiple claims happen when teams submit the same expense again or two people request reimbursement for the same cost. This can occur accidentally, due to scattered documentation, or intentionally, when someone tries to claim the same expense twice.
How to identify and prevent expense fraud: 4 tips
Strong internal processes support small business fraud prevention and reduce reliance on manual judgment. Finance teams can take these four proactive steps to lower risk while still keeping workflows efficient.
- Write clear policies
Establish expense policies↗ for meals, travel, and subscriptions to create clarity from the start. Automation applies expense rules to each request, so employees see exactly what qualifies before submitting. Approval rules guide managers to review only valid requests.
- Increase visibility with automated tracking
Centralised data makes expense activity easier to monitor. When reimbursements, invoices, and card transactions sit in one organised place, finance teams can compare categories and spot issues before they escalate.
The table below highlights the benefits of unifying expense data versus relying on manual processes.
- Use virtual and corporate credit cards
Organisations can issue virtual cards↗ and corporate cards↗ with spend limits and assigned categories. This approach gives finance teams clearer oversight of company spending and prevents personal expenses↗ from slipping through. It also minimises the number of reimbursement requests employees need to submit, limiting opportunities for fraud.
- Streamline approvals and audits
Automated approval chains route expense requests directly to the right reviewers, reducing back-and-forth delays. Consolidated receipts, metadata, and transaction history let teams verify that each claim aligns with company policy without spending time manually gathering documents. The system logs every step, including requests and approvals, creating a complete record for audits.
How Moss simplifies expense fraud prevention
Moss brings key spend workflows into one platform and helps finance teams improve visibility with a real-time overview of outgoing spend. For example, budgets support tracking actuals versus planned amounts in real time. Activity from employee expense cards↗, reimbursements, and invoices feeds into a single dashboard, preventing details from getting scattered.
Moss helps teams reduce company card misuse↗ by applying spend controls (such as merchant category and time-based restrictions) and by enforcing receipt collection policies, including automatic card blocking when receipt rules are violated.
Moss supports configurable approval policies, budgeting features, and card spend controls (such as merchant category and time restrictions) to help teams set guardrails that match their organisation.
Moss supports receipt collection with tools like receipt finder for email (which scans hourly and can fetch receipts from supported merchants after a card transaction) and mobile forwarding via ‘Send to Moss’, which suggests the relevant transaction for attaching a receipt.
Moss helps teams reduce fraud risk with configurable controls such as spend restrictions and automated receipt collection policies (including hourly checks and automatic card blocking when receipt rules are violated)
Staying in control with automated safeguards
Expense fraud often increases when manual processes leave gaps. Automation closes those gaps by enforcing rules up front and automatically collecting documentation. Centralised tools, like Moss, offer finance leaders stronger compliance, fewer errors, and clear visibility across all spending workflows.
For companies seeking stronger oversight, Moss reimbursements provide reliable controls and give finance teams actionable insights — helping them manage spending with confidence.
Book a demo today↗, and see how Moss can give your finance team complete visibility, control, and compliance.
