Even if you have a tight accounts payable process with a best-in-class invoice automation system, it’s impossible to catch all of the errors, waste, and fraud in your business spend. We let our AI platform loose on our customers’ invoices and contracts and found all sorts of opportunities to help them reduce spend and comply with policy – from duplicate spend, to padded prices, to fraudulent suppliers. In our latest State of AI in Business Spend report, we highlight nine of the more egregious “gotchas” from our customers’ AP processes (anonymized, of course). In the first of our three-part blog series, we’ll cover the backstory behind the first three examples.
Two different prices – in the same contract
Our AI platform automatically extracts and understands contract terms from contracts in unstructured documents. We’ve found that contract pricing isn’t always as clear and organized as you’d expect. In some cases, AI has found different prices in the same contract. One way this happens is if there are two different parts of a contract, such as the service agreement and statement of work. In more than one instance, our AI caught different prices within each of these areas.
Invoice for IT equipment that’s 5x the market price
Our AI always finds tons of examples of invoice over-charges. Sometimes this is expected, since procurement teams make decisions on a host of factors besides price, including the supplier’s reputation, trustworthiness, quality of the deliverables, and included services or delivery service levels. But when the product or service is otherwise undifferentiated, something fishy may be going on. In this case, the invoice in question was for commodity IT equipment with no service contract and a standard warranty, but the supplier charged a per-unit price that was five times the market price. Yikes!
Partner contract that expired over a year ago
One of our customers discovered that they were doing business with a highly strategic partner whose contract expired more than a year ago. Since the company’s top line performance and business strategy are highly dependent on this partnership, operating under an expired contract put the company at risk. Needless to say, this discovery prompted them to reach out and begin negotiating a new contract.