It’s the holiday season and for many, this signals festivities, shopping, and celebrations. As these expenses begin to rack up for employees, are any sneaking extra charges into their expenses?
AppZen, the world’s leading AI platform for modern finance teams, looked at millions of expenses from its aggregated, anonymized, direct customer data from December of last year to identify trends in unauthorized (as in, out-of-policy) spend being submitted for reimbursement during the holiday season.
They have put together a list of some of the craziest expense reports and craziest things that people have tried to put on an expense report:
Lunch with oligarchs
Lunch with foreign officials is a big no-no in the eyes of the Foreign Corrupt Practices Act and U.K. Anti-Bribery Act, which sees lunches, gifts, or “anything of value” as bribes (which violate these regulations and result in enormous fines). AI will flag attendee names on meal receipts to make sure your employees aren’t dining with any foreign diplomats or heads of state, keeping your company out of regulatory hot water.
Gear from Lululemon
You’d be surprised how many clothing receipts we see. In this bold move, an employee expensed over $250 of clothing from Lululemon. There wasn’t even a business reason listed – it’s possible they thought that it wouldn’t be caught, or felt justified in their purchase. This trick didn’t pass AI, which flagged the retailer as an out-of-policy expense.
An employee submitted a receipt for gold-plated cufflinks. The reason? A gift to a famous rapper. It’s unclear if he ever received them.
Starbucks gift cards
We see this one all the time! Employees will add a $20 gift card to their morning coffee run on a business trip. The receipt is reimbursed by the company, meaning you’re footing the bill for several more lattes than you intended. A human auditor probably wouldn’t question a receipt for $25 from Starbucks, and it would pass the meal limit thresholds set by your policy, but AI will scan the itemized receipt and flag the word “gift card’ to an auditor’s attention for review.
“Airbnb” on a friend’s couch
In this creative scheme, two friends were in cahoots. One of them posted their home on Airbnb at a ridiculously high price that no one would ever pay. Their associate who participates in the scheme would stay there whenever he was in town and submit the listed price for reimbursement, splitting the money between themselves. AI noticed the higher-than-average room rate for the region and flagged this to auditor attention.
Strip club “services”
Strip clubs like Spearmint Rhino typically have DBA names they use on receipts so they can stay undetected by expense report approvers. AI knows that “K-Kel, Inc” is not a name of a restaurant, but the DBA name for Spearmint Rhino (and you’d be surprised how often this is flagged!)
Cigars for the team
Whether it’s buried in an itemized receipt or under an unfamiliar brand name, AI can detect the brand names of hundreds of out-of-policy purchases. In this case, a manager expensed cigars for his team as a reward for a great quarter. While we’re totally on-board with perks and rewards for employees, this manager might want to pick something that’s within their company policy next time.
An “extramarital” travel companion
Sometimes an expense report may seem too high for one person. In this case, the expenses were being used to cover an executive’s travel costs, including business class airfare and meals for a companion on a business trip to Europe. Company investigations later revealed that this wasn’t for their spouse.
Private helicopter ride
Traffic jams can get pretty terrible in certain cities – but a private helicopter ride? Maybe this employee had an extremely important meeting to attend, but whatever the reason, this unauthorized expense was flagged by AI for auditor review.