How to Catch Mistaken and Fraudulent Expenses

Last updated: March 7, 2024

My next post was going to cover how we track our expenses, since I’ve been wanting to do that for a while, and my last post detailing our 2023 expenses gave me extra motivation.

But as I was writing that post I realized I had quite a bit of content regarding how to validate our expenses – i.e. ensuring there are no mistakes or fraud on our credit card statements.

So I decided to split that out into a new post, and post that validation content first. Since in general you want to make sure all expenses are correct before you organize them. 

Moving this validation content into a separate post will make the expense tracking post more reasonable in length as well I suspect. 

Capturing Receipts

The best way to confirm an expense is correct on your credit card / bank statement is to find the actual receipt for the purchase. Another reason it’s so important to always ask for the receipt when you buy something.

BUT, holding on to thousands of small slips of paper is annoying. Really annoying.

Enter one of our most important tools for tracking and validating expenses: Expensify.

We use the free version and it has all the capabilities we need.

Mrs. EYFI was the first to find this tool, as she hates physical receipts even more than me.

Every time we get a new receipt, we use the Expensify App to take a picture of the receipt and capture just a few pieces of info:

  • Merchant name
  • Date (defaults to the current date, so nice incentive to record it same day)
  • Amount
  • Short description of product/service (e.g., “groceries”) (optional; and if the merchant makes it obvious what the product/service was, no need to do this)
  • Tag indicating what credit card we used (very optional, but it can be handy)

You can capture your receipts as you get them (my preference), or you can wait until the end of the month and process them all at once.

While I’m normally a big proponent of building your own tools whenever you can, I do highly recommend Expensify.

In addition to using Expensify to validate expenses, I also use it to extract items from different expense categories on the same receipt for expense tracking. This is particularly handy for stores where you buy multiple categories of expenses (Target, Walmart, grocery stores, etc.). I’ll cover that process in the next post when I describe our expense tracking process.

Validation Process

Every time we receive a credit card statement, I go through the following process.

First I open Expensify and pull up all the expenses that have receipt photos over the dates listed in the statement. Select the “Cash/Other” category, which Expensify uses for photographed receipts.

For each expense I see in Expensify that was put on that credit card, I somehow mark it on the statement (a pencil with a paper statement, or some kind of annotation/highlighting tool with a digital PDF statement), and I add that expense to a new report in Expensify.

I typically name the report using the credit card name and the statement date.

Then I look through the statement for any other charges I don’t have physical receipts for, and try to validate those in other ways:

  • search my email for any emailed receipts
  • search my files for any purchase confirmation website pages I saved as PDFs
  • login to the relevant portal for the company/organization that generated the expense to find confirmation of the purchase
  • ask Mrs. EYFI if she can confirm the expense if she made the purchase

We typically link our credit card accounts to Expensify so that it can download our account activity automatically. So after validating an expense I don’t have a physical receipt for, I just add the downloaded expense entry to the report.

If you’re not comfortable linking your credit card account to Expensify, then you can also just add your expense manually to Expensify, and then put it in your report. Just takes a bit more time.

Once I have all expenses validated and added to the report, I confirm that the total generated by the report is the same as the total I see on the credit card statement.

Then I close the report in Expensify and get rid of the statement.

Validation Must Be Independent

The most important thing to remember in this process is to independently validate each expense: don’t just trust that every expense reported by your credit card company is correct. You need an independent verification of that expense outside of what the credit card statement / company says.

That means you shouldn’t use any email / text / app notifications you get from your credit card company as validation of that expense – an incorrect or fraudulent charge would be in those notifications the same as your statement. 

Now of course we still have times when we can’t find a receipt anywhere, in any form (e.g., it got lost somehow). So for those instances, we try to think hard about the expense to make sure it seems correct based on our memory of the purchase. And if it’s a pretty small charge, we also don’t worry about it as much.


Using the above process, we have caught a wide variety of incorrect charges over the years. 

Examples include:

  • Medical and dental charges that insurance should have covered
  • Groceries that were mistakenly double scanned at the store
  • Not getting the discounts we should have, from coupons not getting scanned or other reasons

Fortunately though, mistakes don’t happen very often for us. 

And even more fortunately I can’t recall any fraudulent charges. But if we did have such a charge, it would stick out like a sore thumb immediately.

All told I’d say I spend probably an average of 15 to 20 minutes on this process for each credit card statement, though for short statements it’s often just a few minutes or less.

Finally, on top of ensuring you aren’t paying for any merchant mistakes or fraud, this validation process can make you far more aware of your expenses in general. I’ll focus on further improving that awareness in the next post.

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