What to Do About an Employee Accused of Expense Fraud

One of your workers submitted an inflated claim. Now what?

Written by Advisory Board

Welcome to Advisory Board, a weekly department in which a panel of experts—made up of entrepreneurs and professionals—answer questions you have about how to run your business better.

This week, a reader asks:

“The accounting department flagged an employee for filing an inflated expense receipt. The employee claims it was an honest mistake, but her explanation wasn’t particularly convincing. Do I fire her or give her a second chance?”

Here’s what the experts have to say:

Fire her. There should be no shades of grey with honesty and integrity. Plus, if you let it ride there will be employees who will know that you let it ride and it will send a very bad signal.”

John Wilson, founder & CEO, CEO Global Network, Toronto

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Due process is very important in an organization. If you have a policy to address issues like this, then follow it. If you don’t, I would suggest a process where investigation of the incident is completed before any action is taken.”

Phoebe Fung, proprietor, Vin Room and VR Wine, Calgary

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“I would suggest giving the individual a warning, and very carefully scrutinizing every expense report thereafter. In every personality, we look for patterns. It’s not individual incidents that dictate the abilities of the individual, but rather the behavioural patterns.”

Jeff Quipp, founder & CEO, Search Engine People Inc., Toronto

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“I would give her a second chance but make it plain that any irregularities on expense reports will be considered grounds for dismissal. You’ll need paperwork to back a firing like this when she can easily claim an error.”

Kelsey Ramsden, business guide and founder, SparkPlay Inc., London, Ont.


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Originally appeared on PROFITguide.com