Artificial intelligence tools are changing the way we work, but not always for the better. While AI can help with data analysis and decision-making and free up time by handling tedious tasks, it can also open the door to a new breed of fraud.
One growing concern among finance teams is AI expense report fraud, where dishonest employees use generative AI tools to create fake receipts that look completely legitimate, which they then submit for reimbursement.
According to a new report from the expense management platform AppZen, AI-generated receipts now account for 14% of fraudulent documents submitted as of September 2025. That’s a sharp increase from virtually zero instances in 2024. If your company relies on manual reviews or outdated software to catch fraudulent expense claims, you need to prepare yourself for the possibility that not every expense is legitimate.
The Rise of AI Expense Report Fraud
Faking receipts to submit with expense reports isn’t new. But AI makes them more sophisticated. Easily accessible AI image and document generation tools make it possible to create a convincing invoice in seconds.
These fake documents are often so realistic that even experienced auditors struggle to spot them. Employees can tweak amounts, change dates, and even invent entire trips using documents that look perfectly authentic. And since AI can mimic the layout, typography, and even the “wear and tear” of real receipts, these fake expenses can slip through standard verification systems undetected.
AI expense report fraud isn’t limited to small-dollar claims, either. Some employees are creating receipts for business trips that never happened or exaggerating client entertainment costs.
How AI-Generated Receipts Slip Past Detection
Most fraud detection systems can easily catch common red flags, such as duplicate invoices, suspicious vendors, or obvious inconsistencies. AI can create documents that look unique and pass those basic checks, though.
It’s more than just replicating company logos, too. AI tools can accurately recreate watermarks, QR codes, and merchant formatting. Even the metadata within the file can appear legitimate, making it almost impossible for standard expense management software to tell real from fake.
Stopping AI Expense Report Fraud in Your Company
So, how can corporate expense management teams stay ahead of AI expense report fraud? The financial impact might seem minor on a per-employee basis, but across a company, it adds up fast.
It starts with acknowledging that your current review methods are inadequate in the face of rapidly developing technology. Consider implementing AI-driven fraud detection systems that analyze spending patterns and document origins, not just what’s printed on the receipt.
Other smart moves include:
- Training on ethical expense reporting
- Implementing audit automation that cross-checks receipts with transaction data
- Establishing clear financial compliance policies with stiff consequences for falsified claims
The line between innovation and exploitation grows thinner by the day, and the tools that make work easier can just as easily make fraud harder to detect. Companies must evolve as AI expense report fraud and employee reimbursement scams evolve. Whether you manage a small business or a global enterprise, understanding the potential for AI-generated receipts is the first step toward protecting your bottom line.
