Expense management is a foremost priority if an organization is aiming to manage their costs better by analyzing various expenses incurred by employees. By expense management, we mean tracking hard copy receipts, preparing expense reports, looking for policy checks and then assimilating the data and gaining insights from it.
But doing this task manually can be a very tough challenge. Moreover, chances are, things can get missed or have unintentional errors introduced, resulting in faulty analysis observations.
What if this expense management system was automated using artificial intelligence? AI completely redesigns and automates the expense management system.
Expense tracking and creating expense reports could be done with the click of a button. It also learns and identifies what are the approved workflows, prevents fraudulent reimbursements, analyzes expense data, and helps businesses in preparing a profitable budget.
Below are some approaches by which expense management can be made more efficient with AI.
a) Eliminate Hard Copy Receipt Stacks:
You do not need to program your systems, as it will learn the tasks. This stream of AI is called Machine Learning. Extracting and using data from electronic receipts with an intelligent expense management system is a very popular approach today, even if you use printed receipts.
The system retrieves the relevant information from just a receipt picture and then converts it into binary form and stores it for use. Organizations adopting this Machine Learning approach are bound to have an edge over their competitors in the market.
b) Automated Policy Violation Check:
With AI, expenses analyzing to check for policy violations do not need to be handled by finance team executives anymore. The software is smart enough to detect suspicious expenses without any manual intervention. It will only ask for suitable clarifications in case of insufficient justifications for any expense policy violation.
After receiving the inputs from the approver, such as a charted accountant or a manager, the system will process the data and prepare an expense report in minimal time. Thus, the members of the finance team now no longer need to manually prepare time-consuming expense report spreadsheets and the accountants will directly get these systems formatted reports with absolutely no errors.
Precise informative expense reports will be very useful for the business to prepare a suitable budget after relevant cost cutting.
c) Automated Travel Expense Management:
When a travel expense report is processed manually, usually the current data is focused on. We only come across some low-level policy violations or some other clerical errors.
But if an AI-based management system is used, it will parse across the entire expense data history of the traveler and try to identify any unusual or non-compliant spending pattern over time.
This does not seem to be possible for an individual to come across any such anomaly while auditing the expense reports.
d) Using Analytics from Big Data:
Manual formulation of expense analytics is now a practice of the past. This is the era of AI and Big Data. A large volume of data stored by the artificial intelligence system as historical information, in huge data sets for analytics is called Big Data.
The more the amount of data available, more efficient is the output generated by the AI. The software uses this stored data related to expense transactions of the business to find out spend patterns and trends. The machine learning algorithms then evaluate these patterns and prepare expense reports.
Using these reports the organization can not only identify the present expense scenario of the business but also forecast probable financial patterns which will enable it to check other avenues of cost reduction and achieve business objectives.
The Bottom Line
Artificial Intelligence is constantly updating itself and will soon replace manual effort. Needless to say, that the output generated will be much more productive. Effective expense control is the foundation of an organization’s productivity which will eventually result in good profits.
Automating the expense management system will help improve operations and reduce costs. Financial organizations who can embrace the change will gain expertise that will make them valuable in future business process transformations.