Expense Fraud Isn’t New Because of AI; It’s a Systems & Operational Problem

AI receipt fraud is all over the news. Like this report by TechRadar that found fake AI receipts accounted for 14% of fraudulent documents submitted in September 2025.

While AI makes fraud more prevalent (or at least more visible), the bigger issue is that too many organizations are using expense systems that were designed long before AI or sophisticated digital fraud was common, leaving gaps attackers can exploit.

AI-generated fake receipts are getting more realistic every day. At the same time, the tools designed to detect them are improving, but not at the same rate. Which is simply a reminder that detection alone will never be fully reliable.

Even the best scanning models can miss sophisticated forgeries because detection happens after spend occurs.

That means any workflow built on: “reviewing receipts → deciding if they’re real,” will always carry risk, manual effort, and uncertainty.

This isn’t a failure of your team or your tools. It’s a limitation of the reimbursement model itself.

Fake Receipts Aren’t the Core Problem. The Workflow Is.

Organizations that still rely on spreadsheets, manual reimbursements, or partially connected ERPs tend to see more errors, more exceptions, and more opportunities for fraud attempts. But fake receipts are rarely the root cause. Instead, they’re a signal that the expense environment has:

• Limited upfront controls
• Heavy dependence on manual review
• Data spread across systems
• Policies enforced after spend, not before

Most reimbursement workflows still follow a similar path:

“Spend first → upload a receipt → wait for someone to verify it.”

This approach asks finance teams to validate transactions after the money is already out the door. Even when digitized, the underlying workflow leaves room for mistakes, slowdowns, and inconsistent oversight.

Removing Friction from Your Expense Operations

Fraud may get the headlines, but day-to-day operational drag is what truly slows teams down:

• Reconciliation cycles that stretch longer than they should
• Chasing missing receipts
• Inconsistent data from card feeds
• Approvals that bottleneck
• Limited visibility until month-end

These challenges arise because the system requires constant intervention to keep things moving.

The Shift from Reactive Scanning to Controlled Spend

AI-powered scanning tools can help flag anomalies, but detection is still reactive. A more effective approach is to reduce the reliance on receipts altogether and control spend at the moment it happens. That’s where structured spend systems come in.

By using prepaid corporate cards with built-in spend controls, organizations can:

• Limit where and how cards can be used
• Restrict purchases to specific vendors or categories
• Set role-based spend limits
• Control which days or locations a card can be used
• Automate approvals and data capture
  

When purchases are governed at the point of spend, the entire dynamic shifts.

If a purchase can only occur within predefined controls, there’s no oportunity to generate a fake receipt.

This reduces fraud attempts, cuts down reconciliation work, improves data quality, and increases audit readiness.

Controlled Spend Minimizes Risk and Operational Drag

A controlled spend environment also eliminates the manual work built into reimbursement processes:

• No more receipt chasing
• No more manual audits
• No more fragmented data
• No more month-end surprises
  

Controlled spend systems stop fraud and build a system that removes friction and fragility altogether, flowing directly into finance systems already categorized, compliant, and aligned with policy.

If You’re Still Using Spreadsheets, Modernization Will Have the Biggest Impact

Many finance teams still rely on Excel for coding, reconciling, or validating expenses. While it’s a common reality, it’s also one that comes with a lack of control over spending. Laying AI scanning on top of spreadsheets just adds another level of complexity to a system that was never built for control or scale.

The biggest fix comes from rethinking the workflow itself.

The modern model is control at the point of spend.

Modern expense management is shifting toward systems that:

• Apply policy rules before a transaction occurs
• Integrate spend directly with the ERP
• Automate tax rules, coding, and categorization
• Provide real-time visibility into budgets and exceptions

With these fundamentals in place, fraud becomes significantly harder, reconciliation becomes faster, and finance teams gain confidence in their data.

Build a System Where Fake Receipts Can’t Enter in the First Place

If your workflow still requires employees to upload receipts for verification, the system is doing the hard work for your team. Forward-thinking organizations are moving away from chasing documentation and toward shaping spend in real time.

Because when expenses are validated at the moment of creation, the opportunities for manipulation shrink.

That’s exactly what DATABASICS delivers: automated controls, instant verification, and compliance guardrails built into every step.

Book a demo to see how DATABASICS strengthens your controls from the moment expenses enter your system.