Spend compliance is no small feat in Manufacturing
Manufacturing companies are under more financial pressure than ever before. With global competition, shrinking margins, uncertain supply chains, and regulatory compliance to contend with, finance teams have their work cut out for them. They need to keep business spending at bay, including employee expenses and direct and indirect invoice-based spend. They need to mitigate risk across all aspects of the business, from sourcing raw materials to maintaining strong labor relations to detecting accounting fraud to keeping the company out of legal hot water. That’s a tall order!
When it comes to your business spend, you need to suss out errors, waste, and fraud that can impact your profitability. That means watching employee expenses as well as invoice-based spend. On the expense side, managers, salespeople, and knowledge workers must travel to build relationships with customers, suppliers, and partners. Staying in policy may not always be on their minds. They make all kinds of mistakes like submitting the same receipt twice, fat fingering expenses on their report, upgrading plane tickets, hotel rooms, and rental cars, and going over your limit for their business meals.
Beyond errors and waste, fraud can also be an issue if you don’t keep an eye out. According to the Association of Certified Fraud Examiners (ACFE), Manufacturing is the second highest riskiest industry for corruption after Energy. The organization calculates the median loss for expense reimbursement fraud as $31,000 per scheme. Those infractions can add up and even lead to more sophisticated and costly fraud schemes if left unchecked.
On the invoice side, the median loss for fraud schemes is more than three times that of expenses, according to the ACFE. Besides outright fraud, there are tons of examples of invoicing errors that can hit your margins. Depending on your level of AP automation and centralization, your organization experiences an invoice error rate between 10 and 30 percent, according to the Institute of Finance and Management (IOFM). Many invoice automation systems catch simple errors like duplicates with the same number or amount, but usually miss more complex duplicates, especially if there are multiple charges or charges across AP systems. In Manufacturing, where every penny counts, making sure invoices reflect the correct payment terms and volume discounts you are owed is not easy at scale. Complicating matters, you may have disparate back-office systems that make keeping track of spend even more onerous than usual.
Top aerospace manufacturers use AppZen
Enterprises that use AI to audit spend find 8x more regulatory violations than those that don’t.
Key use cases
Audit 100% of expenses and invoices before you pay
Use AI to audit 100% of expenses and invoices, all before you pay a cent. Auto-approve the low-risk stuff and flag risky spend for your real people.
Shape employee spending behavior
Nobody’s reading the paper-based spend policy? Surprise, surprise. Instead, show people the way with AI-based auditing and automatic approvals.
Avoid duplicate spend and suss out all errors, waste, and fraud
Let AI do the detective work for you, finding duplicates even across AP systems and detecting mistakes, wasteful spending, and even the fraudsters.
Reimburse employees in record time
Take away managers’ rubber-stamp and auto-approve low-risk spend. Cut reimbursement from weeks to hours and employees will jump for joy!
Keep your company out of regulatory hot water
Need to keep an eye on anti-bribery and corruption in your expenses, contracts, and invoices? Suss it out with AI.
Make sure invoices comply with contract terms
Remember those contracts you negotiated? Are all of those volume discounts and payment terms showing up on your invoices? Be sure with AI.
Using AI for regulatory compliance
Regulatory compliance is also a big issue for manufacturers. There are more anti-bribery and corruption, export control, and sanction-oriented laws than you can shake a stick at, and despite your best intentions, it’s easy to get caught in the regulatory net. Every year, Manufacturing companies make up the bulk of regulatory actions such as FCPA that can carry stiff penalties, not to mention damage your reputation. Clues to regulatory violations are in your accounts payable systems. Payments such as bribes to foreign officials, stock or cash payments that influence purchases of your company’s products, and spend with debarred or sanctioned companies all can be found in your enterprise spend platform.
What is required is 100 percent audit of all of your expenses, invoices, and contracts. It should understand and keep track of your corporate policy and negotiated vendor contracts, as well as all spend-related regulations. And finally, it needs to protect you from overpaying, double-paying, or being the victim of fraud.
AI-powered spend auditing from AppZen will keep your Manufacturing business humming. It will help your finance team validate and control spend on direct and indirect supplies as well as contractor services, monitor spend for regulatory violations, and cut bottlenecks out of your approvals workflow so employees and vendors can get paid on time. Our platform is a must have for modern finance teams to reduce spend, comply with policy, and streamline process.
We had a slew of fraud and misuse cases. AppZen gives us a far more proactive understanding of our spend. We were manually auditing 20 percent of our spend. Now, it’s 100 percent.”SENIOR MANAGER, COMPLIANCE
Three of the top five manufacturing firms audit spend with AppZen.
Easily automate common expense policies
Pre-built expense management apps for the most sophisticated finance AI. Enforce compliance requirements and tailor T&E workflows unique to your organization.
How Electrolux transformed their T&E process
With AI, Electrolux has streamlined their T&E process. AI has enabled their audit team to only m...
Airbus Flying High with AI: 99% Accuracy in T&E
With Covid came home-working and economic strain. Companies already using AI had an advantage. Early...