Having too relaxed an expense claim system can be detrimental to both a business's finances and to its reputation, according to the Federation of Small Businesses (FSB).

Spokesperson for the FSB Stephen Alambritis says that false expense claims can cost significant amounts of money that could have been invested back into the business.

In addition, companies' reputations can be affected by losses incurred in this way.

'If word gets out that a particular business has lax procedures for expenses that can get through to investors and bank managers,' he continues.

Firms need to ensure they have a 'thorough and rigorous' expense procedure throughout the company. Otherwise the relationship of trust between employer and employee can be lost and other employees may feel resentful at dishonest workers' behaviour, he adds.

Research by Travelodge has found that employees claim over one billion pounds in spurious expense claims each year.

The most common fake expenses were obtaining extra taxi receipts to make false claims, adding extra mileage, and using a cheap restaurant for entertaining clients then going to an expensive one and submitting that as the receipt for the client meal.