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For the Gen Z and Millennial generations, technology is something they can't imagine life, work, or school without. Meanwhile, the older generations can remember the days of not having computers, let alone any technology to enhance work productivity. Typically when the Gen X and Baby Boomers generations hear about adding technology into the workforce, they automatically think their jobs will become redundant.
On the contrary, technology can't fully replace individuals, but it can help organizations to enable their employees to focus more on the strategic initiatives, rather than tactical tasks. To be fearful is short-sighted. By incorporating Artificial Intelligence (AI) into an organization's finance technology stack, it can help spot the patterns the human eye isn't trained to do. So many audit and compliance functions within finance and accounting departments are still very manual, it is almost impossible to avoid risk exposure with the massive amounts of data we have today.
Over the past month, I have been involved in several conversations with our customers. The main topic has been around the fact that while spend is currently down due to the pandemic, non-compliance and fraud are up over 200%. Below are a few examples on how they have used AI and ML to spot the patterns and see it all across their financial systems.
Ticket Credits with Airlines
When business travel came to a screeching halt in March of 2020, several of our clients reached out to the airlines to negotiate credits to be granted to the company, not the employee. With travel starting up again, employees are seeking reimbursements for the full airfare costs while credits have been issued behind the scenes. With the use of AI, finance departments are able to identify specific merchants who have granted credits and compare them to employee expense reports.
Gift cards have always been a topic of interest with finance teams. When employees purchase gift cards, there is no way to track who they were given to. As we all know, the IRS considers gift cards of any amount given by employers to their employees as taxable income. Utilizing AI technology, you can establish high risk merchant categories, identify whole number spend and analyze level 3 details that would indicate gift card purchases.
Are employees allowed to expense meal reimbursements while working from home during the pandemic? Our customers say no. In one of my recent conversations with a customer, he told me that he had to tell an individual, just because you are used to ordering lunch every day while traveling for business, doesn't entitle you to have the company pay for your daily meals. If it weren't for the AI indicators implemented in his finance auditing systems, our customer would have never caught this spend that was out of compliance.
Home Office Expense
With individuals working from home for the past 18 months, there has been a significant increase in home office expenditures. As Mike and Chris talked about on their recent podcast, audit teams are un-familiar with this type of spend. What is considered a reasonable expense versus something frivolous? How can you control what is purchased with your existing travel and expense policy? Do you set up special guidelines for the pandemic? Auditing these expenses can be time consuming and almost impossible as there is no standard. So instead, rather than wasting your time, utilize AI or Machine Learning to help flag odd and unusual expenditures to be reviewed and allow your audit team to focus on the more strategic initiatives.
Utilizing AI and Machine Learning will allow your finance team to better collaborate with the compliance department to determine if certain expenditures meet the requirements of acceptable purchases during these uncharted waters we’re now living in.
Want to learn more about Oversight capabilities? Follow along with our Nothing Gets by You Now Series, check out oversight.com, or request a demo to see our AI-powered platform in action!