Only just over half (51%) of small companies and business startups have a formal expenses policy in place, leaving them open to fraudulent and unnecessary spending, a business advice survey by independent research company Loudhouse suggests.

The study, commissioned by American Express, suggests that 48% of small company employees believe they claim more expenses now than a year ago, with the average monthly claim now £119.

There are substantial regional differences in the amounts of money claimed, however, with Londoners saying they claim just £95 a month compared to £140 in the north-east.

The business advice report suggests that companies that fail to keep track on employee expenses leave themselves open to abuse or errors. It found that 60% of employees said they were able to claim expenses without receipts at least some of the time, while nearly a fifth (18%) thought it was acceptable to exaggerate claims and 14% admit to having done so.

Over half (61%) thought people became more lax in their attitude towards employee expenses the longer they have been with a company.

“It is important that companies understand the value of implementing a formal expense management programme,” said Brendan Walsh, senior vice president at American Express Commercial Card. “By monitoring and analysing employee spending, businesses can piece together a complete picture of company expenditure and begin to negotiate better deals with suppliers, as well as stamp out any unauthorised spending.”

The business advice survey also revealed that while the majority of UK workers said they would treat company money in the same way as their own, 79% contradicted themselves when putting this into practice.

“This attitude of employees towards spending company money clearly demonstrates the need for small businesses and business startups to take tighter control over their expense management policies,” added Walsh. “It is understandable that employees will sometimes have differing attitudes to spending the company’s money but employers need to encourage policy compliance among employees to make savings.”

But there was some good news for companies that fail to keep a grip on employee expenses, with 82% of staff saying they thought it was unacceptable to exaggerate claims.