Spas and strip clubs on expenses. Forgotten volume discounts on invoices. Be all-seeing when it comes to your business spend. No magic wand required.
Making sure your business expenses comply with policy, negotiated contracts, and spend regulations is no small feat. It’s hard to get people to read the T&E policy, much less follow it. When it comes to invoices, you may not even have the latest negotiated contract, so checking all of your negotiated volume discounts and payment terms right can be elusive at best. And regulatory compliance? If you’re auditing only a fraction of your expenses and invoices, how the heck do you keep your company out of hot water and off of the front page of the newspaper? There’s payment transparency legislation in the Life Sciences industry such as the Sunshine Act in the US, European Federation of Pharmaceutical Industries and Associations Disclosure in the UK, and the Loi Bertrand in France. Then there’s anti-bribery and corruption legislation for anyone doing business overseas like the Foreign Corrupt Practices Act in the US, UK Bribery Act 2010, and Germany’s Administrative Offences Act (OWiG). Heck, in many countries you even have to watch alcohol spend for anyone doing business with government entities.
Without doing regular expense report auditing, your chance of catching all of your non-compliant spend is miniscule. It may not matter for the team dinner that went a few bucks over the limit or that bulk order of whoopie cushions you purchased for the last all-hands meeting. But what about that bribe your vice president just made to a Chinese official? Or the trip your east coast sales team just made to the tattoo parlor on the company dime? Or the business lunch your head of marketing expensed at Treasures, which sounds innocent enough but is in fact a strip club.
If you work for a conservative organization or one that does business with governments or publicly-funded organizations, you have an obligation to review all T&E spend for these kinds of policy violations. But even if you work for a place that’s hip and liberal, you still may want to keep an eye out. Your company’s expenses can be the smoke that can sound the alarm to where the fires are. The newspapers are full of stories about bad executive and employee behavior in which the first clues show up in expense report audit.
To make sure your T&E spend complies with policy, what’s required is a way to audit 100 percent of your employees’ expense reports, before reimbursement. You need to detect unauthorized purchases, spend that exceeds your policy for a category, or expenses that can get you in legal trouble, and all in a scalable way.
You don’t need a magic spell to make expense policy violations vanish. Get it done in a snap with AI-powered expense auditing from AppZen.
Enterprises that use AI to audit spend find 8x more regulatory violations than those that don’t.
AppZen is helping us create a culture of compliance.”Senior Manager,
Auditing invoices and contracts for policy compliance is a tall order, whether it’s reviewing invoices against contract terms or looking for regulatory compliance violations in contracts. This is especially true for enterprises with robust purchasing programs that have thousands of different contracts with vendors and pay tens of thousands of invoices each month. Even with AP automation, there’s no way to review all of those transactions to ensure they comply with your spend policy, vendors’ contract terms, or regulations prior to paying them and still move at the pace of your business.
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). Whether it’s as simple as validating price and units against your PO or as complex as making sure that every invoice complies with the payment terms and volume discounts you’ve negotiated on your statement of work, invoice non-compliance is a huge issue.
Beyond corporate and contract compliance, regulatory violations can also hide in invoices and contracts. A payment to a health care professional, teaching hospital, or contract research organization can constitute a violation of healthcare payment transparency legislation such as the Sunshine Act. One to a politically-exposed person or entity can get you in hot water with governments that have anti-bribery and corruption legislation such as the Foreign Corrupt Practices Act.
To comply with policy, what’s required is a way to audit all invoices automatically and before you pay. You need to catch unauthorized spend, invoices that don’t reflect your contract terms, and invoices and contracts that may violate the law.
The best way to accomplish this is with AI-powered invoice and contract auditing from AppZen. Our platform lets you surface non-compliant invoices and contracts and tells you what you need to know to make them right, all before you pay. It’s not magic – it’s AppZen!
INVOICE ERROR RATE
We need to account for all payments to healthcare providers for the Sunshine Act, even stock options.”Vice President of Compliance,
Audit 100% of spend, pre-payment.
See unauthorized purchases, expenses that exceed your policy, and spend that can get you into legal trouble.
Make sure invoices comply with discounts and payment terms you negotiated hard for in your contracts.
Besides pricing, make sure there are no gotchas in your contracts, such as insufficient or expired insurance.
Alert on regulatory violations, such as to the Sunshine Act or Foreign Corrupt Practices Act.
Don’t just comply with the law. Find and neutralize conflicts and embarrassing spend before it bites you.
Mortenson is leaning forward in its use of AI. The company uses AppZen to ensure policy compliance, keep an eye on spend, and streamline process for the audit team.
Learn why AI is a must for modern finance teams.
Modern finance teams are embracing AI to audit their invoice-based spend. With AI, they can review all of their invoices prior to payment to spot errors, fraud, and contract violations.
Learn the value of AppZen in this 90-second explainer video.