Small Businesses implementing AI to make employee reimbursement decisions achieve 100 percent visibility, contrasting with 2-10 percent for businesses that don’t have this ability. Those are just two of the findings from AppZen’s, “The State of AI in Business Spend” report.
Employee Expense Reimbursement Trends
Small Business Trends contacted Anant Kale, CEO of AppZen, to find out more about the trends affecting employee expense reimbursements.
Technology Moves Beyond Mere Automation
“The latest trend in T&E (travel and expenses) is that technology is finally maturing enough to be useful and effective for modern finance teams,” he wrote in an email also stressing how this situation has changed.
“In previous years, technologies like automation were helpful to a point but did not allow finance departments to enable themselves to make smarter decisions about T&E and free them up to work on larger, more strategic initiatives and projects for the company.”
AI Adoption Streamlines Auditing
One of the results to adopting AI is a streamlined auditing process. Non-AI enabled auditing departments take around two weeks to reimburse any employee expenses. The report found that half of the businesses using AI completed an expense report and approved it within four hours.
Kale further clarifies why this trend is important:
“Artificial intelligence (AI) tools can help your auditing team gain visibility into business spend to find duplicate receipts, spending that does not comply with company policy or common sense use of company funds, meals or gifts to politically-exposed individuals.”
Deep Learning Solves Complex Problems
He goes on to say that good AI should have three features when it comes to employee expense reimbursements.
“The first is deep learning which is the ability to solve complex problems based on high volumes of training data. The second is computer vision which is the ability to extract knowledge from digital images as inputs for the purpose of making decisions. The third is semantic analysis which is when AI uses rational sets of logic to reason and come to its own conclusions.”
Some Expenses Still Flagged High Risk
The report also found that while there were only 10% of expenses that were flagged as high risk in Q4 2018, they accounted for one-third of the total dollar value for all expenses.
According to Kale, setting guidelines around travel expenses should be at the top of a small business list. The report highlights expense averages that make a difference for small businesses looking to reference what they might and might not want to include.
Businesses Become Clearer About Policies
A well-defined policy communicates what employees can and cannot reimburse,” he writes. “This will ultimately help your company save money and achieve predictable financial results.”
Most businesses are clear about policies surrounding things like hotel and airfare expenses, but the report found some gray areas like the fact that 46% of companies reimburse for gifts and 39% for golf.
Only 16% of the respondents reimbursed for room service while 41% covered cell phone expenses. Some of the more wasteful spends included gambling losses and strip clubs.
The “The State of AI in Business Spend” gathered data from nearly one thousand AppZen enterprise customers across a variety of industries from October 1 through December 31, 2018.