Today, many aspects can go wrong with a typical company’s audit spending procedures. Auditing supplier invoices manually with employee expense reports are tedious and time-consuming. Several organizations canceled conducting partial audits, which caught some discrepancies because of the time it took to complete one.
However, it leaves your business at a higher risk for fraudulent activities and errors.
Read on to learn how artificial intelligence (AI) can enhance your auditing processes and minimize corporate spending.
1. Prevent Double Payments
Often, an invoice will stall at various stages of the sales cycle. Maybe it failed a three-way matching process, or perhaps the approver is out of office.
Meanwhile, the supplier follows up, and someone else interferes to manually pay the outstanding invoice without even checking at what stage it was being held. Later, when the system clears the hold, it will automatically pay that invoice again.
This double payment takes place more often than you might think, and usually, nobody can catch it. Artificial intelligence helps prevent these types of issues by monitoring all company spending and checks for any duplicate invoices or payments.
2. Catch for Fraudulent Activities
Today, expense report and invoice fraud is unfortunately prevalent and can hurt your organization’s bottom line. Inactive organizations may bill for products they never provided or send fraudulent invoices that are a part of a bigger phishing scam.
Workers sometimes submit the same lunch receipt as another coworker, knowing both will be reimbursed thus, causing the company to pay for the same lunch twice. With AI, you can examine every invoice for risk factors and flag anything that seems fishy for an auditor to review.
3. Audit before Paying
Once payment has been made, it can be challenging to get the amount back later, even if you can prove the charge was fraudulent. If you are lucky enough to recover it successfully, doing so will take up your valuable time and could be a significant disadvantage when not having the cash on hand to complete your other business transactions. AI makes it possible to audit expenses before making a payment.
4. Review Invoices and Reports
At many companies, the idea of humans reviewing each expense report and every invoice is a costly and time-consuming process. There are employees, lots of reports, and other pertinent responsibilities that take up reviewer’s time. But, luckily, the most critical factor of AI is its ability to comb through documents quickly and assess the risk factors instantly.
When an invoice is received, AI systems can immediately check if the amounts and details match those on the contract. Same way, when an expense report is submitted, AI searches through it to verify it doesn’t have any violations like out-of-policy spending or duplicate receipts, so it can flag the reports with an issue to investigate further.
5. Prevent the Misuse of Travel and Entertainment
In many organizations, travel and entertainment are considered the second largest uncontrollable corporate expenses. They are challenging to manage, given they are usually multiple small expenses from various sources, continuously. It has been observed that above 10% of travel and entertainment expenses are fraudulent or mistaken.
Some employees spend company money on accessories, tattoos, and other types of personal purchases, thinking the company would not find out. Other violations comprise of claiming personal trips as corporate-related, upgrading tickets to first-class, purchasing weekend meals with friends, and so much more.
Artificial intelligence can help you monitor and track down these types of issues, making sure the inappropriate expenses are not reimbursed. Also, it provides you with the details required to address these sorts of problems.