We’re living in exciting times. Digital transformation has made tremendous advances in how we submit, approve, and pay expense reports over the last decade.
Not long ago, expense reports were manually processed by submitting paper receipts, scanned receipts and Excel files. We’ve come a very long way.
Expense report automation has been a big win for your travelers because it is much more convenient to get their reports submitted. It’s been a big win for everyone in the ability to process and approve reports. And, of course, it’s been a big win for your bottom line as well.
I’d like to underscore a point about why this has been so successful. Every expense in your organization must be reconciled – whether it’s on your corporate card or an out-of-pocket transaction, it must go through this approval process in the same fashion.
But the same technology that has been such a big win over the past decade in how we can submit, approve and pay expense reports has done very little in terms of strengthening the controls for T&E programs.
Whereas 100% of expense transactions must be submitted and approved in the same fashion, only 2% to 4% of all transactions in any travel and expense program are problematic. The technology that has been so good at enabling faster approvals and payment is simply not designed to identify the 2% to 4% of problematic transactions versus the 96% to 98% of transactions that are perfectly compliant. I’m sure everyone is all too familiar with the litany of audit rule-driven warning flags for transactions that are most likely perfectly fine.
Digital crossroads for T&E
We are at a crossroads in terms of how organizations are approaching the problem of controlling their travel and expense spend. Many organizations are still trying to automate or digitize their paper process by leveraging the capabilities of their travel and expense management system.
However, by and large, nothing has meaningfully changed from how organizations were auditing 10 years ago. It’s just that now, it’s in a digital format. What has changed significantly is the volume of expense reports coming through, partly because they’re far more convenient to submit through automated systems.
Better approach for expense audits
As a result, you now have heavier workloads. You likely find yourself manually reviewing expense reports but approving most of them. Of the problematic transactions you do find, they probably will be low-level items and clerical errors. This results in unnecessary processing delays, rejections of expense reports back to employees and overall increased friction with the traveler base that can be avoided in many cases.
There is a much better way. Leading companies aren’t simply digitizing the paper-based audit process that they had before – they are transforming it altogether. These businesses are achieving stellar results by:
- Eliminating manual expense audits and reviews
- Broadening their risk coverage beyond low-level clerical findings into the high-risk items posed by these programs, including fraud, waste, misuse, and non-compliance
- Fostering a culture of compliance by influencing employee behavior
In Oversight’s on-demand webinar, Leveraging AI and the Power of Patterns to Transform Your T&E Audit Process, I’ll show you how continuous monitoring and automated risk mitigation can help your business detect and stop fraud in your travel and expense program.
- Why manual audits won’t find most hidden fraud risks and what to do instead
- A proven way to create a streamlined risk mitigation workflow and increase compliance by up to 70%
- How to optimize your T&E business processes, achieve 2-5% cost savings, and reduce T&E audit workloads by over 50%
This is part 1 of a blog series on Leveraging AI and the Power of Patterns to Transform Your T&E Audit Process.