The objectives of an audit of employees’ expense reports are to limit the number of non-compliant receipts, control costs, and reduce the risk of fraud. The audit also helps avoid excessive tax adjustments, especially regarding the VAT.
Unfortunately, the strenuous nature of expense reports management, which can be particularly time-consuming, sometimes means there is little time left for spendings reconciliation, or an actual audit, whether internal or external.
It is estimated that up to 20% of employee expense reports or either incorrect or fraudulent. Audits should therefore be integral to the verification process, especially since they can now be facilitated by software such as Notilus.
The benefits of an expense report audit in the accounting and financial departments
Non-compliance, and duplication of expenses, which are then reimbursed twice, can be costly to a company, especially if expense reports are a major expense item.
Whether it is intentional or not, employees may sometimes forward old expenses, report the same ticket more than once, exceed the budget’s maximum allowable amount, or claim personal expenses. They may even falsify receipts using image editing software, although it is less common.
An audit of expense reports makes it possible to spot and address abuses like these and optimize all the associated costs. This is even more true when internal or external audits are greatly facilitated by the use of a dematerialization solution for expense reports.
Automating expense management with Notilus saves a lot of time and provides a quick return on investment as it cuts down on costs generated by inefficient expense management:
No more misuse, fraud, and waste, that inflate the bill for the company.
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With our OCR, all fields such as VAT, currency or amount are automatically detected. With the electronic archiving, your expense receipts are stored in a secure cloud, no more paper.
Best practices for expense report audits in accounting and finance departments
An audit of expense reports can be carried out at three points in time: before and after the manager’s approval, which both occur before the payment is concluded, and after the payment. Ideally, it should be done pre-payment whenever possible, as soon as the expense reports are submitted.
There are several points to check in an expense report, among which:
- Is the report adequately supported by a receipt or some other pieces of justification?
- Does the receipt qualify for VAT refunds according to the regulations in place?
- Has the budget been exceeded?
- Were the expenses incurred in the interests of the company?
- Are the receipts coherent with the actual itinerary of the employee, possibly planned and approved by his manager beforehand?
When time is short, Notilus allows the accounting and finance departments to focus their monitoring specifically on employees who have shown before to spend more than others. It is also possible to run an audit over a third of the expense reports every month, to detect employees with non-compliant receipts.
As shown above, expense report dematerialization solutions such as Notilus make auditing simpler and more convenient: not only do they make all the data readily available, they also directly speed up verification processes.
Furthermore, Notilus also offers automated analytical reports based on all the recorded expenses of a company. Consequently, fewer efforts need to be spent on issue detection and investigation, and the risks related to travel are reduced as well.
In conclusion, the Notilus software significantly strengthens the control procedures of expense reports, by facilitating the entire process of verification and approval, allowing access to receipts in a few clicks to check for duplicates, and providing quantified data in the form of management charts.
Our solution is dedicated to the moblity management. In addition to the expense reports management you can plan, book and track your business trips. It is also possible to manage your car fleet.
