By Susanta Kumar Padhi
Employee expense claims form a significant part of operational expenditure for any organization, whether it’s a start-up or an established enterprise. With the emergence of new forms of accommodation and traveling, spending management is becoming more complex. Employees now want more freedom on where to spend, from booking their own Uber to selecting their preferred hotels or airlines.
More than 40% of employees prefer booking directly from a supplier’s website rather than via their company’s travel unit. Organizations can no longer dictate to their employees to book flight and hotel tickets through their travel unit. Therefore, expense fraud is becoming a pressing issue that weighs down the financial performance of entities. Organizations unknowingly aid travel expense fraud by neglecting the travel expense claims that can quickly add up.
Automating Expenses Management with AI
The central concept of Artificial Intelligence (AI) is to copy how humans think and interact. New-age software platforms with in-built AI capabilities effectively perform tasks as humans do. As managing expenses is a crucial part of growing and maintaining a sustainable business, implementing an all-inclusive expense management solution will help control the expenditures of a company. It will also help eliminate spending issues that negatively affect the company’s bottom line. Relying on spreadsheets to capture and allocate expense-related data can be time-consuming, and it can also give rise to fraud.
AI-based Expenses Software is a Game-Changer for Effective Expense Management Process
Warns About the Out-of-policy Expenses
AI can automatically analyse expense transactions and receipts, making the expense reports submission process more accessible. But one of the key highlights of AI-based expense management software is that it warns about out-of-policy expenses. Fair processing of expense data requires a bias-free system. AI validates the expense data based on the company’s pre-defined expense policies and sends-out automated alerts for out-of-policy expenses.
Optimizes Policy Compliance Rates
Enforcing travel expense policies on employees and maintaining compliance can be daunting when there is no proper system in place. When a multitude of expenses start pouring in, it’s difficult for the finance team to track and ensure compliance. AI allows a company to customize the expense management platform based on its travel policies. Simply put, AI-powered expense management software is customizable.
Prevent Expense Fraud
The process of identifying and eliminating fraudulent transactions and claims has been an effort-intensive process. However, manual reviews and audits can only help to spot only 25% and 30% of expense frauds and open a window for fraudulent instances. AI-powered expense software solutions automatically understand the context of incurred expenses by scanning and extracting the crucial data from expense receipts, such as boarding passes, travel documents, and restaurant bills, with Optical Character Recognition (OCR) technology and stores securely on the cloud platform. This extracted data will then be matched against real-time data gathered from thousands of sources to validate and confirm the expense receipt details, such as the vendor’s name, prices, location, and more. The solutions automatically flag the receipts with inaccurate or duplicate data and alert the appropriate authorities to avoid reimbursement.
The Bottom Line
As per recent research, more than 10-15% of financial fraud in large organizations is related to expense reimbursements. Many top-line enterprises such as Sap Concur, SutiSoft, and others are providing highly innovative and advanced software solutions that not only simplify processes but also help to eliminate fraudulent activities.
Implementing AI-powered expense management software such as SutiExpense and Certify can help automate travel expense reporting process and enables businesses to effectively manage company’s expenses while eliminating fraud.
The author is senior vice-president of finance, My Home Industries PVT LTD