Travel & Expense Finance AI Did You Know?

How to stop employee travel upgrades from downgrading your bottom line

by Gary Malhotra July 12, 2021

Our ongoing “Did you know?” series highlights the capabilities and benefits of AppZen and how you can take advantage of our solutions’ capabilities. In this post, we examine travel compliance and unauthorized upgrades.

With business travel beginning to bounce back, and now being required at some companies, it's natural to expect that employees who have been hesitant to travel will want to experience adequate comfort and safety. After all, there are still risks to traveling away from the comfort of home and loved ones for a business trip, especially when new coronavirus variants are still spreading, not everyone is vaccinated, and masks are not mandatory.

Companies will do well to update their travel and expense policies to reflect the new social, health, and business realities. However, they must also continue to monitor current travel policies for compliance, and ensure that employee upgrades don’t end up downgrading their bottom line.

There is a rising incidence of employees stretching corporate travel policies for personal benefit, including airline, car, and hotel upgrades; companion travel; and pet care. There has also been an increase in the use of out-of-policy services from approved merchants and the use of unapproved merchants. To illustrate, one of AppZen’s customers found an employee was using a pet facility to take care of his dog and billing the expense as a hotel stay — the receipt looked exactly like a hotel receipt.

Finding non-compliant transactions, however, is easier said than done. For example, non-compliant employees will often upgrade to business or first class at the airline gate. The fees can often be buried in a line item under the regular receipt, or be found in level 3 P-card/credit card data, which often goes undetected. Similarly, detecting upgrades to rental cars, railway cabin types, and hotel room suites, requires the ability to read unstructured data on merchant receipts. 

Even when unstructured line-item data on merchant receipts are present, it is hard to extract and read using basic OCR tools. Even when it can be extracted, an understanding of the content and context of the receipt is required to truly predict if it's a policy violation. This requires augmenting the unstructured receipt data with an understanding of branded terms, commonly used expressions, online public and social data about the merchant’s services, and your corporate expense policy.

Some employees exploit dual-use merchants, such as hotels and restaurants, that provide approved services like meals, and those that are unapproved, like alcohol, spas, gyms, adult entertainment, or massages, for instance. They cleverly use misleading terms on receipts to disguise, bundle and misrepresent the services consumed. Simply reading unstructured receipt data is not enough! Expense auditors must have an understanding of commonly used expressions and branded terms around the service to understand what was bought and if it is out of policy.

Finance AI technology from Appzen understands and solves these challenges. Our Mastermind AI can read unstructured data on receipt line items; level 1, 2, and 3 credit/P-card data; itineraries; and folios. It then looks for clues based on an understanding of the terms on the receipt, their relationship to each other, their relationship to branded terms and common expressions, their relationship to social and online data about the merchant and their services, and their representation in your travel policy.

For example, Appzen Mastermind AI can verify hotel identities in real-time to flag expenses misclassified as lodging, like the pet boarding charges expensed as a ‘hotel,’ in the earlier example. It can identify out-of-policy upgrades and add-on services on a receipt, such as a mini-bar or in-flight alcohol. It also checks for bookings made outside of travel management companies or preferred travel agents and identifies spousal travel bookings in travel itineraries. 

To learn more about how you can ensure travel compliance and audit 100% of expenses prior to reimbursement, please request a demo!

In the weeks to come, we will be discussing more details on how to manage expense audits, including verifying receipts and amounts, detecting out-of-policy spend, suspicious merchants, duplicates, among other topics. Till then, stay tuned and get in touch!

Gary Malhotra

Sr. Director of Product Marketing