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Get Four
|  | MAY 4, 2006
The Risky Business of Padding T&EThinking about fudging on your travel-and-entertainment expenses? Don't. No matter how clever you think you are, it's all been done beforeOdds are that if you have an expense account, at one point or another, you have probably abused it. The abuse might have been relatively small -- having a client dinner and adding your spouse's meal to the tab -- and you may not have given it a second thought. But even if you were able to justify it to yourself ("I work incredibly hard for the company, and I should be able to pay for my spouse"), the folks in accounting may not take such a liberal view. After all, it's not your money you are spending. It's the company's. Fortunately, most people don't view their travel-and-entertainment (T&E) expense accounts as a license to steal. For the most part, the expenses they ring up are entirely justified. Many executives log thousands of air miles and stay in countless boring hotel rooms every year on business. Fickle clients need to be wooed over expensive dinners and golf outings. Loyal customers need to be rewarded with the same. Depending on one's job level and available budget, many businesspeople can rack up hundreds of thousands of dollars in T&E every year. (As Mara Der Hovanesian wrote in "Eagle Eye On Your T&E" in the May 8 issue of BusinessWeek, companies spend "tens of billions of dollars" every year on T&E, making it the second- or third-largest category of corporate discretionary spending.) LAVISH MEALS AND LODGINGS? And yet, some will still inevitably pad their legitimate expenses with phony charges. There are, of course, many reasons why people do it. The most obvious may be, why pay for it yourself if you can get the company to do it? Many abusers believe, usually unrealistically, that it's okay to fiddle. Everyone does it, they reason, so why shouldn't they? Then there are people who use their T&E card to live beyond their means. Sure, they can't buy a Porsche with it, but being able to whip out the company Amex to pay for meals, travel, and other expenses -- and getting the company to reimburse you for it, to boot -- can help bridge the gap between income and outflow. The problem, of course, is that it is tantamount to stealing. Less immoral but still sneaky are those people who apply their T&E to company business but end up treating themselves more generously than the company might prefer. Instead of staying in a three-star hotel, they'll book themselves at a five-star hotel for several hundred dollars more per night, or they'll upgrade themselves to a first-class plane ticket. WATCHFUL EYE. Of course, some lucky souls out there don't need to worry about padding their expense accounts because their T&E is so generous that there is no reason to. These are often the CEOs, the star salespeople, the masters of the universe, the rainmakers. The irony here is that typically the people with the biggest T&E budgets are also those who earn the most. But then again, the whole point of T&E is to earn the company more money, not merely to allow executives to lead more plush lifestyles, even if that is often the case. Before you file bogus expenses, remember that there is very little that hasn't already been done. These days not only are CFOs keeping a sharper eye on discretionary spending, but also there are external T&E management services, such as Redmond (Wash.)-based Concur Technologies (CNQR ), as well as improved monitoring by corporate card companies such as American Express (AXP ). And remember too, if you get caught, the best thing you can hope for is that the company will make you reimburse it for the bogus charges you made. At worst, it could get you fired or even arrested. So the next time you think you can get away with having the company pay for a nonbusiness-related fancy meal or a first-class ticket, think twice. It's probably not worth it. To check out some of the most typical expense-account abuses, see our slide show. 
BW MALL
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