With fraud prevention increasingly a board-level responsibility, businesses need to look beyond major financial transactions and examine everyday spending, including employee expenses.
The Ministry of Justice recently published its Counter Fraud Strategy for 2026–2030, days after the first anniversary of the failure to prevent fraud offence, which came into force in September 2025.
The renewed focus stems from weak financial controls remaining in place in the UK, with three former company directors sentenced to a combined 15 years and nine months for their involvement in a £70m pension investment fraud.
Furthermore, a 2025 Cifas survey found that 24% of employees surveyed believe expense fraud is justifiable, identifying it as the most common type of workplace fraud committed. Employees are also increasingly using AI to generate fake receipts for false expense claims.
The scrutiny of corporate financial controls is increasing, but businesses are failing to focus on the right risks. While large-scale fraud attracts the headlines, thousands of employee expense transactions are being overlooked.
According to AccountsIQ Group, which is made up of AccountsIQ and ExpenseIn, businesses are not doing enough to prevent inappropriate or fraudulent spending before it reaches the accounts. Many focus on payments and procurement, while employee expenses remain an overlooked control point, particularly when spending, approvals and accounting data are disconnected.
Darren Cran, CEO of AccountsIQ, said, “Organisations tend to focus on larger payments and sophisticated fraud, while hundreds of thousands of everyday employee expense transactions receive less scrutiny. Therefore, expenses need to be an important part of a financial control environment.
“Many finance teams think an expense policy solves this issue, but having a policy is not the same as having control over employee spending. Some expenses are submitted days or weeks after money has been spent and are then checked manually, meaning teams find issues later.”
“UK businesses need to rethink the role of expense management within their financial controls,” added Richard Jones, VP of Product at ExpenseIn. “Expenses do not need to be treated like an admin task that is completed after money is spent. Organisations need greater insight into how their expenses are captured, reviewed and approved, and how quickly that information reaches their finance teams.
“By adopting a better-connected, digital process, finance teams can identify expense issues more quickly and establish stronger spending controls.
“Upgraded expense platforms include controls built into the process itself, so receipts can be captured digitally when money is spent, expenses are checked against company policies and claims are routed for approval.”
“However, controlling expenses is only one part of the process,” added Cran. “Finance teams will also need expense information to feed into financial reporting and establish a record of how much was spent, why it was spent and how it was accounted for. The combination of expense and accounting data gives finance teams greater visibility and a clear audit trail instead of having to source all the information from different systems.
“A shift towards connected financial management will enable organisations to get a clearer overview of employee spending and ensure that the information is captured accurately by accounting teams.
“CFOs and finance teams should now check whether the anti-fraud controls they have in place across their organisations are working. They need to establish where money is being spent, whether policies are being followed and whether there is an audit trail to follow if something is uncovered.
“As the government puts greater emphasis on fraud prevention, organisations need to review their financial controls and establish whether they are in a position to prevent problems such as the abuse of expenses. Financial control should be something an organisation can demonstrate, not a written policy,” concluded Cran.