By Lauren Bowling 12.15.15

Last week, Oversight debuted the second annual Spend Analysis Report, a compilation of data gathered from an analysis of 16 million purchase card transactions and 32 million expense report transactions. Those transactions totaled $3 billion in spend, and was made by a group of 250,000 travelers. The report this year covered ground in many areas, but especially in demonstrating how Oversight Insights On Demand™ is a powerful tool for benchmarking spending data and identifying various types of suspicious out of pocket expenses.

So, what specific types of out of pocket expenses are we talking about? If a company has a strong travel card program, cash advances and tips for drivers, bellhops, waitresses, and hotel staff are the most common out of pocket expenses submitted for reimbursement. Santa Clara, CA and Tokyo, Japan had the highest rate of out of pocket expenses, but San Francisco, CA and Alpharetta, GA had the highest instances of suspicious out of pocket spend. We also found that travelers tip the most in Phoenix!

Out of pocket expenses also present an opportunity to circumvent travel policies, so they should be monitored closely, which is why Insights On Demand looks for anomalies in the spending data (such as MCC code, where the purchase was made, if it was made on a weekend) to detect if these were in line with company policy, or something more nefarious.

The annual Spend Analysis Report also includes a section on duplicate expenses. Oversight Insights On Demand software classifies duplicate submissions as those transactions that appear more than once (for the same date, same amount, and same merchant) on different expense reports. In this study 0.25% of transactions were flagged as duplicates. The most common duplicate transactions occur when two employees (of the same company) go out for a company meal, or when someone expenses airfare more than once.

We like to highlight duplicate transactions in the report each year because they are large areas for financial waste in the organizations we serve, and also the easiest to identify and fix. Sometimes duplicates happen for benign reasons, like merchant error or a traveler’s lapse in memory. Other times, duplicates are a deliberate attempt to pocket extra cash.  From the set of 32 million transactions in this report, nearly 81,000 are duplicates for a total of $3.1 million in “extra” transactions. That’s a lot of cash lost each year! In our analysis we found that duplicate expenses occur most often in Allentown, PA and Sacramento, CA, but showed up the least in Jacksonville, FL and Cincinnati, OH.

Isn’t it interesting how each type of transaction (duplicate, out of pocket, potentially fraudulent) cropped up in a different city each time? This indicates to us that every travel program is different, which is all the more reason each organization needs a detective control like Insights On Demand. We didn’t want to give too much away in the blog post, and what you’ve read above are just select snippets. To truly get the full idea, you have to read the whole report. To get your free download of the 2015 Spend Analysis Report, click here.

See Related Blog Posts: Travel & Expense, Purchase Card

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