By Beverly Kays 09.12.18

Now that school is back in session, millions of parents are starting to see their back-to-school purchases show up on their monthly credit card statements. The average household spends an estimated $510 on back-to-school clothing and accessories, supplies, computers and other electronics for their kids.

But I bet you didn’t realize that companies end up footing some of that bill for back-to-school expenses? 

No, it’s not employees grabbing a few supplies out of the company supply closet and bringing them home for their school-age kids. Instead, it’s parents who use their corporate travel and purchase credit cards to supplement their kids’ back-to-school expenses.

Without an automated auditing and risk mitigation solution like Oversight Insights On Demand® in place, many companies are none the wiser that employees are passing off personal items as business expenses.

We did a quick scan of T&E and P-Card data starting to roll in and quickly found suspicious traces of back-to-school and other personal expenses hiding in plain sight:  

Back-to-school supplies. From a $135.99 backpack to 99-cent Crayola Crayons to $2.29 Elmer’s glue sticks, you name it, we can find it in T&E and P-Card data. In all my years working, I’ve never used a crayon or a glue stick in the office, have you? But we find such personal spending every year at back-to-school time. Unless you take the time to review receipts and enhanced level 3 credit card data, your employees could be passing off their kids’ binders, filler paper, rulers, number 2 pencils, and pink erasers as valid business expenses.

Lunch and snacks. Unless your company provides free snacks for employees and your office administrator handles those purchases, you shouldn’t be finding expenses like these in your T&E and corporate card data: 12-packs of Shark Bites fruit snacks, Jif-to-Go Creamy Peanut Butter, and 15-count boxes of Nature’s Valley Granola Bars.

Ziploc sandwich bags. I mean, really?! Rare is the company that would stock plastic sandwich bags in employee breakrooms. But I’ve found dozens of examples of employees expensing such items. I guess some people find it too easy to throw in an extra box of Ziplocs with a few valid business expenses. After all, they may reason, it’s only another $3.19.

Electronics. Last but not least, I found $60 game controllers, $279.99 iPads, and one employee who spent $697 on an iPad mini, Bose speakers, a Google Home, among other items. Obviously, if you’re letting employees buy and expense their own electronics, you might be exposing your company to increased risk of fraud and misuse. For example, an employee could be tempted to slip in an extra iPad (or maybe a game controller). Not to mention all the valuable corporate discounts that your organization could be missing out on by not using approved and centralized IT hardware purchasing channels.

Here are 5 quick tips to help you stop the fraud and misuse of corporate cards for personal expenses.

  • Send periodic policy reminders to employees to remind them to use their corporate credit cards only for valid business expenses.
  • Deploy detective keywords. We searched by “#2 pencil”and discovered an employee who bought $150.39 on pencils, a purple binder, a planner, composition books, a bottle of bleach, batteries, and other office supply items.
  • Use multiple data sources to validate expenses. Don’t rely only on receipts to validate expenses; they are only one form of supplemental data. We’ve seen lots of doctored receipts over the years; don’t let them fool you. Instead, we recommend reviewing enhanced Level 3 transactional data to confirm they have purchased valid business office supplies, not binders and a new back-to-school book bag for Johnny.
  • Track employee spending trends. Is this a one-off case where an employee mistakenly sent in a duplicate expense, or accidentally used the corporate card for a small personal purchase (like a box of Ziploc bags) at Target or Walmart? A gentle policy reminder might be all that’s needed. However, if you’re seeing a clear pattern of misuse and personal spending, an employee may pose a bigger risk to the business, requiring more than a simple hand-slap. Oversight provides companies with an accurate view of corporate spending trends to help you determine the difference between lower-priority minor infractions and high-risk exceptions.
  • Build a culture of compliance (not entitlement). When employees know their purchases are being closely monitored by an automated solution like Oversight, they are more likely to comply with corporate spending policies.

For more tips on how to build a culture of compliance and stop fraud and misuse, download our best practices guide.

See Related Blog Posts: Travel & Expense, Purchase Card, Company Culture

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