Expense management has evolved over the last several years, but in parallel with its increasing importance has emerged a new form of fraud; expense fraud.
Aidana Zhakupbekova, CFO of smart expense management firm Rydoo, spoke to Payment Expert on what is contributing to the rise of expense fraud, how companies can automate their expense management processes, and why employees are now seeking greater personalisation aspects of their expense reports.
Payment Expert: First Aidana, what are some of the most common pitfalls from companies when it comes to expense management?
Aidana Zhakupbekova: Despite its critical role in business operations, expense management is often a major pain point for both employees and finance teams. Clunky, manual processes waste valuable time, drag down productivity, and chip away at the bottom line.
Traditional expense management often means employees saving and scanning piles of receipts, leaving finance teams buried in requests. They’re tasked with figuring out what’s billable to clients, assigning costs to the right projects, and ensuring compliance across different regions. And after all that, they might still discover—too late—that spending has exceeded the budget.
Delays in expense reimbursements, especially during end-of-month crunches, can leave employees feeling frustrated. Add to that the confusion around unclear policies, like per diem or travel allowances, and you’ve got a recipe for duplicate claims, compliance issues, and mounting dissatisfaction.
Employees should be able to submit the right expenses to the right people quickly and easily. Instead, many are losing up to 400 hours a year navigating outdated systems. That’s why forward-thinking companies are turning to digital solutions that automate and centralise expense management. Real-time expenses, greater visibility into spending and budgets, and streamlined workflows free up teams to focus on strategic work, boosting productivity, saving money, and improving employee retention.
PE: With such a valuable expense management market, how critical is providing an efficient expense management process in order to harmonise working environments across teams?
AZ: Efficient expense management is all about improving accountability, reducing administrative burdens and aligning teams.
Manual expense reporting takes up a lot of time, with teams wasting valuable time inputting, submitting or approving expenses. Automating these processes frees up time for employees to focus on more important tasks and also provides real-time insight into company spending, which can help with greater cross-departmental collaboration on budgeting.
Having an efficient and impartial expense system is also pivotal for creating a harmonious and collaborative work environment, as employees can trust their expenses are being handled fairly.
PE: Expense fraud has increased in recent years. Can you outline some factors as to why this has increased?
AZ: As companies expand internationally, enforcing consistent expense policies across regions becomes increasingly difficult. Variations in local guidelines, currencies, and compliance standards can create loopholes, some of which are knowingly exploited by individuals who hope fraudulent claims will go unnoticed.
The cost-of-living crisis has also played a role. Faced with rising personal expenses, some employees may feel justified in blurring the lines between personal and business costs, submitting claims that don’t align with policy to ease their financial burden.
Technology is another emerging factor. With the rapid advancement of generative AI, it’s now easier than ever to create fake receipts and documentation that appear legitimate, making it harder for finance teams to detect fraudulent submissions.
That said, not all expense fraud is intentional. Manual processes often lead to human error, duplicate claims, lost receipts, or misclassified expenses that may be flagged as fraud, even when they’re honest mistakes. In these cases, both employees and companies are at risk of penalties, reputational damage, or compliance breaches.
PE: With AI becoming more efficient and sophisticated by the day, how can the technology assist in helping prevent expense fraud?
AZ: AI is proving to be one of the most effective tools in the fight against expense fraud.
Modern AI systems can rapidly scan and analyse receipts, regardless of language or format, and flag items that fall outside of company policy. For example, AI can process a receipt in Japanese and instantly identify restricted purchases like alcohol or tobacco, alerting finance teams to a potential violation.
In addition to scanning, AI uses advanced algorithms to detect patterns of fraud, such as duplicate claims or altered receipts, whether the edits were made manually or generated using AI tools. These systems automatically flag suspicious entries for review, helping to ensure that questionable claims do not go unnoticed.
Importantly, AI does not replace human judgement; it enhances it. By handling the time-consuming work of detection and analysis, AI allows finance teams to focus on making informed decisions. The result is faster reimbursements for valid claims, fewer errors, reduced costs, and stronger protection against fraud.
PE: Furthermore, how can AI also be deployed to streamline the expense management process?
AZ: AI can streamline expense management by automating tasks like receipt scanning and data extraction, removing the administrative burden from finance teams.
AI-powered expense management systems also have significant benefits for businesses operating internationally. They can now identify official tax, per diem and mileage expense policies, allowing internationally operating companies to remain compliant and mitigate legal risks.
It also helps finance and ESG teams streamline their CO2, ESG and CSRD reporting. This is thanks to specialised formats that can be adapted to meet specific company reporting and compliance needs.
PE: Lastly Aidana, and thank you for your time, what more can companies do to achieve more personalisation qualities to its employees to gain real-time insights of their expense reports?
AZ: I highly recommend leveraging apps for expense management. These tools enable employees to easily submit and track their expenses on the go, helping them stay updated on approval statuses. This means they spend less time gathering receipts and dealing with long monthly input sessions, and more time on high-priority tasks. It also alleviates the end-of-month workload peaks that can overwhelm finance teams.
In addition, these apps offer real-time expense tracking, giving employees visibility into their individual or team spending. This not only helps them stay on top of their expenses but also speeds up the reimbursement process, ultimately keeping staff satisfied and motivated.
