Welcome to our new series of blogs on expense auditing issues, trends, and automation best practices. Our ongoing “Did you know?” series highlights the capabilities and benefits of AppZen Expense Audit, bringing you deeper into what makes it tick and how you can take advantage. In this segment, we discuss how to audit 100% of your expense claims.
With the shift to work-from-home witnessed in early 2020, followed by the recent “partial remote, partial office” trend, fraud has increased, expanded to new expense categories, and become harder to detect. Finance teams must audit 100% of expense claims. But can they afford to do so?
Most finance teams do not have the bandwidth to do a full audit of all expense reports. Finance leaders are hesitant to invest more staff in this area as they are not sure if there will be an appropriate return on investment. Even if additional staff were added, the process of reading every line item on a receipt and comparing it to every line on an expense claim request would take so long, it would delay reimbursement to employees, degrading employee experience.
If the process could be sped up, would it be effective in finding additional risky transactions, and would the aggregate have a meaningful impact on the company’s bottom line? Can a human auditor remember the dozens of creative ways employees have figured out to hide out-of-policy and excessive expense claims? Will any single auditor be able to assess a transaction against all of the possible fraud types in an effective manner?
Let’s first consider the potential benefits of companies auditing 100% of expenses prior to reimbursement. Doing so would enable them to detect risk before they paid, catch excessive spending, and prevent it. Given that current manual practices only audit 10-20% of expense transactions, a 100% audit would mean 5-10 times more fraud detection, expanding the financial savings to 2% to 5% or more of total expense spend.
Finance AI applications that specialize in finance audit make it possible to audit 100% of expenses and invoices in real-time to find errors, waste, fraud, and policy violations prior to payment. They seamlessly integrate with companies’ existing expense management workflow and reduce the finance team’s workload. They remove the existing trade-off between auditing every transaction and adding staff, cost, and time.
AppZen Expense Audit reviews 100% of expenses, typically in only a few minutes, and uses Mastermind AI to detect policy violations, errors, and mistakes that are not possible to detect with manual human review, immediately identifying and addressing 5 to 10 times the number of high-risk transactions.
AppZen Expense Audit uses Mastermind AI to automate the enforcement of even the most complex corporate expense policies, regulatory requirements, and processes, without intervention or confirmation. Mastermind AI understands unstructured data from receipts which otherwise would require humans to read and understand, in addition to structured data like amount, expense categories, and MCC codes.
It also rapidly reads and understands every line of every receipt. It extracts key pieces of information to catch duplicates, out-of-policy, and suspicious spend. It goes beyond receipt image OCR scanning. AppZen’s Mastermind AI understands the content and context of each expense line. It can easily tell the difference between “cocktail” and “shrimp cocktail.”
Mastermind AI is trained with a global T&E library of over 60 million expense receipts and invoices. It continuously learns and updates, providing increasingly accurate and relevant results.
With AppZen Expense Audit, customers get a unique experience, because:
- It is a pre-payment audit tool, unlike most other analytics tools that are post-payment
- It is powered by Mastermind AI, unlike most other analytics tools that are rules-based
- It reads and understands the content and context of unstructured data in each and every expense receipt line, unlike most other analytics tools that only use structured data
In the weeks to come, we will be discussing the details of how to manage expense audits, including verifying receipts and amounts, detecting out-of-policy spend, suspicious merchants, duplicates, and other important topics. Until then, stay tuned and get in touch!
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