Al Franken wrote a book years ago on “Lying Liars,” and I still think the title is his best contribution to humor now that he’s destroyed his legacy by trying to be serious.
In business, particularly in finance and accounting where expense reports are processed, what sometimes begins as a misunderstanding of a little white lie can balloon into tremendous losses or even fraud.
Are you expensing this or am I?
AppZen, a company that automates and debunks expense reports, is raising their game to weed out the errors and egregious overreach with a new enhanced AI platform. As an entrepreneurial venture, they struck on a great pocket of opportunity where the software itself pays for itself ten times over quickly with next to no effort on the part of the accounting administrator.
They were named in 2018 to the Forbes Cloud 100 Rising Stars list, and I wrote about them here. But continuing to prove your worth means evolving what you do, and there’s no better place to innovate in automation than where you already have AI on your side.
Applied AI can remove the losses from self-fulfilling prophecies
To see patterns of abuse, or sometimes misunderstandings, about what will and will not be reimbursed, it is critical to have data. Not just data trending across the industry, but specific to your organization. It is implied that you want your data digitized, but many companies, unfortunately, are still using manual processes for expenses.
Where financial automation tools are concerned, particularly in expense intensive organizations like the Fortune 500, companies tend to take a batch approach. They are looking for limits and significant anomalies while keeping the expense reports moving. In the new advanced AI platform, customers can further automate use cases including:
- Automatically compare vendor invoices with shipping documents—like bills of lading, shipper, consignee, carrier, load number, quantities, pallets, weights, temperature—to ensure accurate invoicing
- Read credit card statements in place of receipts to identify expensed items and confirm that they are in policy, based on semantic understanding of the spend
- Automatically extract data from contract documents and SOWs comparing them with financial statements to identify risks
It’s particularly easy to get lost in numbers and spreadsheets and get arm’s length from the people filing expenses. Even well-meaning, hard-working employees push the envelope on what will be reimbursed or misunderstand T&E policies and don’t take time to get an answer. Individually, they rarely think “this one expense” will make a difference, but we all know that pennies eventually add up to dollars.
AppZen, who now processes over 8 Billion dollars in transaction per year in 40 countries, is working with clients to help them see what people are actually doing—before they are reimbursed.
“You mean I can’t expense that?”
Nothing makes the job of weeding through reimbursement attempts more amusing than seeing what people try to expense. It’s only funny for you to read because you didn’t write a check back to the employee for these items.
Let’s have a little fun at the expense of the companies who no longer reimburse things like this:
- Lunch with the wrong oligarchs – In today’s environment where one man’s political ally is another man’s despot, it is vital to know who’s who when they land on an expense report. Particularly with the Foreign Corrupt Practices Act and the UK Anti-Bribery Act, it is critical to see who is lunching with who and “anything of value” that may be changing hands. The AI in AppZen flags the names of foreign diplomats, heads of state, and others to ensure your firm doesn’t end up on the wrong side of compliance. This brings new meaning to—and justification for—going Dutch.
- Strip club “services” – Clubs get creative with their DBAs, so the names coming through on expense reports aren’t as overt as the names up in neon. For instance, AppZen knows that K-Kel, Inc. is not the name of a restaurant, but the DBA name for strip club Spearmint Rhino. Flagged, after running it up the pole.
- I don’t have the right top for the meeting – We’ve all found ourselves in or out-of-town prepping for a meeting without the proper clothing. It’s fine to buy what you need, but it’s not OK to expense your clothes. One employee tried to expense $250 in clothes from Lululemon and didn’t even try to explain it away. Stay classy (and pay for it yourself.)
The list of these expense efforts goes on from expensive cigars to private helicopter rides to gold-plated cufflinks. For more examples of employee creativity, take a look at AppZen’s report from last year on the State of AI in Business Spend that profiles:
- average audited & high-risk spends
- spend-oriented regulatory violations
- non-compliant spends
- expense policy benchmarks
- spend audit processes
There is always a reason that employees will ask for forgiveness rather than permission. If you don’t have tools that are doing the hard work to understand your expense reports, you have already granted permission.