The smart way to
manage mileage
expenses
“Give somebody an inch and
they’ll take a mile”
2
The smart way to manage mileage expenses
Index
The road to smarter expenses
Digital solution
The cost of mileage fraud
Effective travel expenses management
How it works
Flexible system
3-5
4
4-5
6-8
7
7-8
Compliance controls
8
Culture shift
8
About webexpenses
Exceeding expectations
Contact
9-10
10
11
The smart way to manage mileage expenses
The road to
smarter expenses
3
The smart way to manage mileage expenses
The road to smarter expenses | 4
The biggest danger posed by expenses fraud is ‘death by a thousand cuts’. It’s the
multitude of small losses which can sap away at an organisation’s resources.
Nowhere is this more clearly seen than with mileage expenses and the problem of fabricated
and exaggerated travel costs allowed to go unchecked.
Instead of these abuses being challenged and tackled, they have all too often been
grudgingly tolerated by organisations.
It helped to create an environment in which expenses fraud thrived. The National Fraud
Authority estimates that UK companies continue to lose around £100 million each year to
falsified and exaggerated expenses.
Digital solution
But this is a problem companies no longer need to tolerate.
Digital expenses management has transformed the way we’re able to manage and monitor
our travel claims. Combining cloud-based software with GPS technology, we can now track
employee journeys to within meter accuracy.
For employers, these tools reduces processing time, help to ensure legal compliance and
act as a reassuring shield to help protect organisations against fraud.
For employees, they have a quick, accurate and hassle free way to ensure they are fairly
reimbursed for any legitimate mileage expenses.
So this guide provides an overview of the challenges faced when managing travel expenses
fraud and a look at how technology can help your organisation regain control.
The cost of mileage fraud
To understand how the old ways of managing travel expenses have allowed fraud, it’s
worth looking at some practical real-world examples. Here are four scenarios, based on
cases, which highlight the various ways travel claims are abused by employees:
Scenario A: Falsification
A Bristol based employee has to make regular journeys to another of the company’s
offices in Leeds - a return journey of 420 miles. By checking the company rota he finds
The smart way to manage mileage expenses
The road to smarter expenses | 5
the days when the office manager is away and claims for mileage on those days.
It’s a weekly fraud which remains undetected more than five years with the phantom
journeys hidden amongst genuine mileage claims. It’s estimated to have cost the
company in excess of £18,000.
Scenario B: Exaggeration
A manager at a small Reading based manufacturing company makes a weekly trip to
a supplier. There are multiple routes that can be taken - ranging from 15 to 23 miles in
length.
The employee uses the shortest route but claims for the longest - a 50 percent increase
on the actual distance he travels. Using this weekly claim, he is able to fraudulently
receive around £2,000 each year.
Scenario C: ‘Rounding up’
A carer working for a Welsh health agency makes around five or six journeys each day to
visit patients. She routinely ‘rounds up’ all of her journeys by one or two miles.
With expenses being processed on a monthly basis, it’s not possible for the finance
teams to check the accuracy of each estimate. It results in the employee receiving
around £2,000 each year in fraudulent expenses.
Scenario D: ‘Offsetting’
An employee at a marketing agency attends a monthly conference in Leeds. They claim
for a 12 mile return journey from their home to the conference venue.
But once the morning conference has finished, they return to their office. The mileage
reimbursed therefore includes the regular commute from office to their home. Over a 12
month period it costs the company around £240.
The true scale of the problem can be seen when these kind of losses are multiplied across
an entire organisation. Once the abuse of travel expenses takes hold within a company, it
tends to become a self perpetuating problem.
Employees become emboldened by each and every fraudulent expense which is processed
without being queried. It gives rise to a workplace culture in which workers are almost
expected to be ‘creative’ with their travel claims.
The smart way to manage mileage expenses
Effective travel
expenses management
6
The smart way to manage mileage expenses
Effective travel expenses management | 7
The fundamental problem faced by organisations when it comes to controlling travel
expenses is the lack of information. It’s the grey area caused by not knowing exactly how,
when or where an employee has travelled.
In the past, claims have been based on crumpled receipts and mileage estimates with no
fast or accurate way to verify the information. But there is now an effective solution.
Digital expenses management changes the way organisations are able to manage and
monitor employee travel expenses. Cloud-based software, linked to a smartphone app,
provides the tools required to regain control.
How it works
Expenses management software provides a fast, efficient and cost effective replacement
for old and outdated paper-based processes. The systems allow employees to use a
smartphone app to instantly convert paper receipts, travel tickets and bills into a digital
form.
A quality system will also provide users with the ability to track and log business journeys to
within metre accuracy, using the GPS capabilities of a handheld device. Employees are able
to ‘record’ their journey with all information stored digitally: time, date, location and exact
route taken.
This information is uploaded to the user’s account and integrated into any subsequent claim
they make. It replaces the need for mileage estimates and finance team’s previous reliance
on a ‘postcode lottery’.
This is when, in the absence of accurate data, postcodes are used to estimate distances
between A and B - often using an online tool such as Google Maps. With multiple routes
available to travellers, it’s a system which can provides only a rough approximation.
Flexible system
One of the key features of management software is the ability to configure itself to the
specific expenses needs of an organisation. The way travel expenses are handled will vary
greatly between depending on a company’s size, structure and policy.
The power of a good expenses management system is the ease with which it can handle
this kind of complexity.
A system such as webexpenses allows companies to configure multiple set-ups to cater for
up to five different types of mileage needs. Different limits can be set for separate categories
and flags set to alert account managers when any limit is breached.
The smart way to manage mileage expenses
Effective travel expenses management | 8
The system can also be customised to provide on-screen policy reminders via the user’s’
smartphone app - travel policy guidelines and compliance checks being delivered at the
point of use.
Compliance controls
One of the headaches involved with managing travel expenses is ensuring compliance with
the various HM Revenue and Customs legislations. It can be a time consuming and costly
process to untangle which expenses they need to be informed about and when VAT can be
reclaimed.
With a good quality expenses management system, so much of this process is automated.
The expenses data collected is seamlessly integrated with payroll software. It helps ensure
your organisation claims back everything it’s entitled to and reduces the risk of fines for late
or inaccurate submissions to HMRC.
Culture shift
The simplicity and accuracy of an expenses management system allows an organisation
to effectively manage and monitor travel costs. It cuts processing time and reduces losses
through inaccurate and fraudulent claims.
But the long-term benefits can be more deep rooted.
By regaining control, organisations are able to ‘detoxify’ the whole area of travel expenses.
In the old business world of guesstimates and crumpled travel receipts, it is prone to
becoming something of a company battleground.
Employees exploit the lack of checks and balances, while employers respond with
increasingly strict and inflexible expenses policies. It creates a dangerous loop - employees
feel justified in ‘gaming’ an unfair system.
An effective and properly maintained system removes the grey area in which this situation
develops. It allows travel expenses to serve their original purpose - to reimburse employees
for business related journeys.
The smart way to manage mileage expenses
About webexpenses
9
About webexpenses | 10
The smart way to manage mileage expenses
From day one, webexpenses has only had one objective - to make expenses something you
effortlessly control; not a costly drudge your organisation battles against.
It’s an approach which has fuelled webexpenses’ growth over the past decade; it’s now
the tried and tested solution for hundreds of clients throughout the world - from small
organisations to large multi-nationals.
By giving organisations the tools they need to control expenditures, webexpenses clients
are able to increase efficiency, stabilise T&E spending and reduce operational costs;
providing a speedy return on investment.
Exceeding expectations
The foundation of webexpenses’ success is our powerful and robust software. But at the
heart of the company lies a commitment to exceed expectations - to go that bit further to
ensure our clients’ needs are met.
Each and every one of our clients, no matter how large or small the organisation, is given the
same level of personal service from our client support team. This commitment has allowed
webexpenses to record some of the industry’s highest ratings for customer support and a
97 percent client retention rate over the past five years.
For more information on how we could help you manage your expenses, just contact us.
Webexpenses has some of the
highest customer satisfaction levels
in the industry
2
1
3
About webexpenses | 11
Next steps
+44 (0)800 711 7136
[email protected]
www.twitter.com
/webexpenses
www.linkedin.com
/company/webexpenses
www.webexpenses.com
Please Note: The information contained in this document is accurate at the time of publishing and is meant as guidance only.
We would advise that for any specific information you seek advice from a professional body or adviser, particularly to stay up to
date with legislative changes.