In this article
Spending made smarter
Easy-to-use cards, spend limits, approval flows, vendor payments —plus an average savings of 5%.1
4.8 Rating 4.8 rating
Error Message
No personal credit checks or founder guarantee.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Get fresh finance insights, monthly
Time and money-saving tips,
straight to your inbox
4.8 Rating 4.8 rating
Thanks for signing up
Oops! Something went wrong while submitting the form.

Expense fraud refers to the intentional inflation of reimbursements by employees. It happens when employees deliberately submit false expense claims.

According to The Association of Certified Fraud Examiners' 2022 Report to the Nations, which looked at over 2,000 cases worldwide, expense reimbursement fraud lasted for 18 months on average before detection, making it one of the most enduring types of fraud.

If you're a smaller business, expense fraud can be especially damaging to your financial health. In this article, we'll explain some of the common forms of expense fraud along with methods for preventing it.

Common examples of expense fraud 

There are several ways that expense fraud occurs, and not all of them are intentional. Here's a look at each type of fraud:

Fraudulent business expenses

This is when employees request payment for business expenses they didn't actually incur. For instance, the employee might provide a receipt for a luxury dinner at a high-end restaurant when they actually dined at a more affordable establishment. They may also submit false receipts for expenses like taxi rides, claiming they used a taxi service when they actually used public transportation.

Personal expenses

Like fraudulent expenses, submitting personal expenses for reimbursement is a fraudulent act, but this can be accidental if the employee is using their personal credit card for business expenses. We’ll cover more on that below.   

Multiple reimbursements

Submitting an expense more than once is most often an error, not an intentional act. Expense report fraud detection teams always check dates, so this is easily uncovered if you know where to look for it.

Padding expenses

Another form of expense fraud involves overstating, or "padding" legitimate expenses rather than entirely fabricating them. In this scenario, employees may accurately incur certain business expenses but intentionally inflate the costs or claim expenses that exceed the actual amount spent.

Maverick spend

A variation on these categories is something called “maverick spend.” It doesn’t involve false receipts or fake numbers. The employee spends and submits accurate reimbursement requests—they just don’t follow expense policies or spending guidelines.

Zombie spend

Zombie spend happens when money is continuously spent on goods or services that are no longer used, like SaaS subscriptions. This type of spending can also present the problem of shadow IT. This is when employees sign up for unauthorized SaaS programs or download apps outside the company system, potentially letting malware or viruses in.


Many of the examples listed above are oversights rather than intentional fraud. Still, each instance of unauthorized spending, whether intentional or unintentional, erodes the bottom line of your company and contributes to the cultural acceptance of these behaviors among employees.

How does expense fraud happen?  

Expense fraud is a cultural problem. According to the ACFE's 2022 report, 22% of small businesses (with fewer than 100 employees) and 25% of large businesses or corporations (with over 10,000 employees) experience expense fraud. That means that expense fraud is deeply embedded in business culture. To change that mindset, small business owners need to promote a culture that discourages fraud.


It starts with the little things. For instance, a sales representative asks a merchant to make out a receipt for more than what they paid. This often happens with cash transactions where the merchant is unlikely to report the sale as taxable income. In this scenario, both parties are breaking the law. The behavior is accepted because “everyone is doing it.”—but this mindset becomes systemic over time.


The problem can also be internal. Without proper spend management tools and policies, there’s no checks and balances system to stop employees from “beefing up” their expense reports. Chances are, they learned how to do that from a more senior employee who has been doing it for a while. Each seemingly “harmless” act helps the problem grow.


Responsibility for eliminating the problem of expense fraud in the company rests with business owners. The accounting department may be tasked with finding the erroneous entries, but ownership needs to provide the tools to help them do their jobs.  

How to detect and prevent expense fraud 

To detect expense fraud with a high degree of accuracy, you'll want to use an expense management system that automates the process.

A manual expense management system requires employees to submit reimbursement reports along with their own credit card receipts. Fake receipts and personal expenses can easily slide through such a system, and multiple or overstated submissions only show up after manual scrutiny.


Detecting zombie spend is even more difficult. Most accounting departments need to do a full financial audit to see it, and it could still get missed because it'll be buried in a mass of legitimate SaaS and other software subscriptions.

Corporate cards with automated expense tracking and reporting make detection easy and accurate. At Ramp, we help you monitor spend and flag any potentially unauthorized or fraudulent charges within our dashboard.

You can also prevent expense fraud before it happens by setting up predetermined spending limits and approved vendors or expense categories. That way, employees are empowered to spend on the things they actually need, with no risk of no risk of exceeding budgets or engaging in unauthorized or fraudulent transactions.

Prevent expense fraud with Ramp

With Ramp's finance automation, the days of manual expense reports and fake receipts are over. Upload your expense policy and set spend controls that only allow purchases from certain vendors or expense categories.

We also provide you an online dashboard where you can track expenses in real-time with an API that you can use to connect your expense platform to your accounting software. Expenses can be automatically processed, recorded, verified, categorized, and registered on the general ledger—preventing employee expense fraud.


Ready to curb expense fraud? Sign up for Ramp for free today.

Finance Writer and Editor, Ramp

Ali Mercieca is a Finance Writer and Content Editor at Ramp. Prior to Ramp, she worked with Robinhood on the editorial strategy for their financial literacy articles and with Nearside, an online banking platform, overseeing their banking and finance blog. Ali holds a B.A. in Psychology and Philosophy from York University and can be found writing about editorial content strategy and SEO on her Substack.

Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.


How Alexandra Lozano Immigration Law prepared for scale with Ramp

"I used to have to call our card provider and sit on the phone for a couple hours a week, I don’t have to do that with Ramp.”
Wayne Robinson, CFO, Alexandra Lozano Immigration Law

How Ramp helped Smart City Apartment Locating save time, expedite month close, and grow sustainably

"Five to 15 hours each month of non-value-add activities are off my plate. I’m able to be a strategic advisor versus just a tactical manager when it comes to spend management.”
Dustin Walsted, VP Finance, Smart City Apartment Locating

How TaskHuman built their runway with Ramp

“I’ve pretty much seen or used everything that’s out there, everything does something Ramp does, but nothing does everything Ramp does.”
Matthew Ferguson, Controller, TaskHuman

How First Tee transformed its bookkeeping and saved time with PwC and Ramp

"The efficiency of using PwC Bookkeeping Connect, coupled with the Ramp platform, has probably been about 75% time savings. Instead of every hour I would have had to spend on bookkeeping, I’m probably having to spend maybe 10 or 15 minutes.”
Dan Burke, CEO, First Tee San Francisco

How Mix Talent cut costs, gained transparency, and improved efficiency with Ramp

"I use Ramp’s functionality to examine the contracts and understand whether we’re getting the best terms, as opposed to just trying to get the bill paid. Ramp has allowed us to project cash flow so much better."
Paul Streitenberger, Accounting & Finance Lead, Mix Talent

How The Joffrey Ballet cut their month-end close time with Ramp

“One of the things I was looking for, and which Ramp has done for me beautifully, is to consolidate credit cards, ACH payments, check payments, and reimbursements into one place and give us a full picture for insights."
Gee Hoon Lim, Director of Finance, The Joffrey Ballet

How Beyond sped up reconciliation time 8x faster with Ramp

“With Ramp we close in 5-6 days, which is pretty quick for a company with four different subsidiaries."
Jake Steele, Senior Staff Accountant, Beyond