Is your finance team busy and overworked, but too hesitant to change their spend audit processes? As time-consuming and frustrating manual expense report and invoice audits can be, implementing a whole new software system can seem worse.
Thankfully, AppZen’a AI-powered spend audit platform doesn’t require any changes to your back-end software. It integrates with your existing systems (including expense management, invoice automation, contract management, and ERP) to make the transition as easy as possible. And trust us: once you’ve implemented AI, you’ll never want to go back.
Here are the top nine ways from our new ebook, Artificial Intelligence in Spend Auditing for Dummies, on how AI can help improve your spend audit process (and more importantly, save your team’s time, money, and sanity!)
1. Audit everything
Many companies only audit between two and 10 percent of invoices and expense reports a month. This is a practice born out of necessity: a manual audit of everything would eat up all the finance team’s time (and then some). But it also leaves a whopping 90 to 98 percent of invoices and expense reports completely unscrutinized. Unless all of those are entirely error- and fraud-free (hard to imagine, unfortunately), your company is pretty much guaranteed to lose money each month.
AI is a game-changer, allowing finance teams to audit 100 percent without any additional manpower. AI checks every invoice and expense report and assigns a risk score based on a number of factors, flagging high-risk expense reports and invoices for manual review. This helps your finance team spend their time much more productively and makes it possible to pay back low-risk invoices and reports much faster.
2. No more after-the-fact audits
Auditing after invoices and expense reports are paid out is another practice that many companies implement out of necessity — it’s just too hard to get everything done in a timely manner. This is better than not auditing at all, but it also makes it that much more difficult to claw back spend on erroneous or fraudulent invoices or expense reports. Implementing AI means your business doesn’t have to compromise between paying employees and vendors back efficiently and being rigorous about scouting out fraud and mistakes.
3. Pay early, reap the rewards
It’s not uncommon for vendors to give discounts for early invoice payments, which is a great opportunity to save some cash. But for many finance teams, it’s hard enough to audit and pay invoices on time, let alone suss out which contracts have discount opportunities. AI keeps track of every invoice’s associated contract and can notify you in advance of early-payment opportunities.
4. Stay on top of contracts
In addition to keeping track of early payment advantages, AI helps give you a better grasp on your contracts. This includes giving you plenty of notice when contracts are about to expire or auto-renew, which allows you to cancel or renegotiate for better terms. In addition to expirations, AI automatically tracks hard-to-manage details like payment terms and volume discounts to make sure you’re getting the deals you were promised when you signed the contract. You can also easily stay on top of out-of-date terms, like contractor insurance policies, which are easy to overlook but can be extremely costly should an accident occur and you discover their coverage is expired or insufficient.
5. Match like a star
Matching price and units against invoices, receipts, and purchase orders (as is typical in the three-way match) is no longer enough. Star MatchTM is a key ingredient in your AI-powered spend auditing process, referencing an unlimited number of data points from any document, set of internal systems, and online data sources. It combines this data with information extracted from your documents and contracts, bringing far greater precision to the spend approval process and allowing you to root out fraud, duplicate spend, regulatory violations, and excessive employee expenses.
6. Monitor fraud
According to the Association of Certified Fraud Examiners, occupational fraud resulted in more than $7 billion in total losses in 2018. AppZen’s AI-powered platform audits 100% of spend, spotting unusual patterns that might indicate fraud, e.g., inconsistent addresses or suspicious business names on an invoice or charges on an expense report that don’t match a receipt. Anything questionable is brought to the attention of your team for manual review.
7. Don’t double-pay
Duplicate invoices or expenses can be difficult for human auditors to catch, since they’re often submitted by different employees or months apart. AI scours every line in an invoice or expense report and compares it instantly against the database of every other invoice or expense report ever processed. If an invoice or expense report seems like it might be a dupe, your team is notified before it’s paid out.
8. Stay on top of compliance
Staying on top of anti-bribery provisions or corruption policies such as the Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act, and the Sunshine Act can seem overwhelming. Violating these laws can come with significant potential consequences for your business, including hefty fines. Plus, violations will do a number on your company’s reputation, which can be hard to reverse. AppZen’s AI-powered platform can help your team stay out of hot water by flagging transactions with foreign officials, healthcare professionals, or other politically-exposed people or entities so you can make sure you stay compliant, avoid fees and other punishments, and protect your company’s reputation.
9. Speed up approvals
It may seem like a no-brainer to have managers approve every expense report submitted by one of their direct reports. But if you really think about it, manager approval requirements are usually just a time-consuming bottleneck, giving everyone less time to do the jobs they were actually hired for. Many managers are too busy to thoroughly review expense reports, so they just rubber-stamp them to get them off their desks. With AI, manager approval is totally unnecessary. AI reviews every invoice for risk factors, so you can trust that anything suspicious will come to their attention (and that of the auditors’). AI also allows managers and auditors to access a high-level view of spending behavior that they can drill into whenever they have time, helping them adjust policies and address misconduct in a productive way.
To find out more about how AI can improve your spend audit process, check out Artificial Intelligence in Spend Auditing for Dummies.