If you’ve spent much time at all in T&E management, you’ve probably read other articles and blog posts about employees passing off crazy expenses. About executives buying Victoria’s Secret gifts for their secretaries; sales reps expensing golf lessons; passing off a day at the spa as ‘business related stress relief.’ While these articles are entertaining, they do highlight a serious issue.
Recent studies have found that expense report fraud is still a $441 billion dollar a year problem. Rigid expense policies and rules are put in place to mitigate the problem. But, while even the highest rated, best-in-class T&E management software solutions do a great job of automating the process of creating expense reports, they still fall short when it comes to detecting fraud and misuse. And unfortunately, the most common solution to the issue is still either internal audit or outsourced audit services. But this manual approach is not only time-consuming and expensive, it is also still prone to human error.
AppZen, a big-data company based in Sunnyvale, CA has developed patent-pending software that provides a better solution: automated expense report audit. AppZen analyzes every expense line automatically; detecting for fraud, misuse, and non-compliance that today’s best expense report software simply cannot do. By using artificial intelligence & natural language processing to automate the research and reasoning that human auditors do, AppZen extends the reach of expense audit to understand and verify data that is very difficult and very time-consuming for human auditors to find.
Why is this so important? Saving millions of dollars per year is reason enough for many of AppZen’s larger clients. AppZen is detecting an average of 2.5% of total expenses as being non-compliant: both accidental and intentional. One AppZen client, who is spending $70 million annually on expenses, is saving 2.9% ($2 million) per year on non-compliant expenses alone. The company is also saving roughly 50% of their audit cost (another $340,000 per year) by reducing time spent by their internal auditors, who are now focusing only on expenses that AppZen detects as non-compliant.
AppZen is able to detect the same type of non-compliant expenses that human auditors can find, and more. Such as finding duplicate receipt submissions across multiple reports across multiple employees; fraudulent or cooked up claims; meals & entertainment with ‘ghost’ attendees; personal expenses claimed as business expenses; and many more hard to detect cases. Even violations on IRS rules and industry specific regulations (like FCPA) can be detected.
Because AppZen’s technology does all of this automatically, the savings in both time and money are truly a value-add for companies who are currently using, or plan to evaluate, best-in-class expense management software.