Expense management with AI: a comprehensive guide

Artificial intelligence is upending industries and jobs in nearly every business sector. The speed, precision, and time- and cost-savings AI expense management provides are significant enhancements to all kinds of business operations.

Expense management is no exception to the technological revolution driven by AI. Expense management by AI has the capability to accelerate the completion of expense-related tasks, ensure policy compliance, and provide more data for finance, human resources, and travel professionals. 

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Old Expense Management Models are Inefficient

The tried and true manual method of expense management is antiquated by today’s standards. Command and control approaches are outdated, inefficient, and challenging, if not impossible, for larger, decentralized organizations.

Finance managers can’t easily review every expense manually to ensure compliance. Tracking down receipts and memos can be a time-consuming and inefficient exercise, at best.

For employees, the standard system of expense management can be arduous. Receipts need to be collected and filed. There are countless forms to fill out and budget ledger entries to be made and reconciled.

An out-of-date expense management system can do more than just waste time and resources. It can also foster frustration and dampen employee engagement and morale.

AI can solve that, giving employees valuable time back in their days while streamlining workflows, increasing accuracy, and enabling policy compliance.

How AI Improves Expense Management

Artificial intelligence uses tools, apps, and other technologies to streamline your expense management processes. Automation allows for faster processing, tracking against policy, and approvals.

Using AI tools allows companies to save resources at every turn. Department managers can spend less time approving expenses while administrators can more easily submit and reconcile entries.

For finance teams, automation tools provide rapid reconciliation and automated flags of potential discrepancies and policy outliers. By using AI, businesses can gain better, more accurate insights into their spending and reduce inefficiency and waste.

AI expense management has multiple benefits, including:

• Cost efficiency
• Smarter and more accurate expense categorization
• Automated expense reports and budget updates
• Real-time insights and fewer delays in budget updates and reconciliation
• Reduced risk management and fraud
• Consistent enforcement of financial policies
• Better decision-making regarding policy and budget

Tools and Technologies In AI Expense Management

There are multiple tools used as part of an AI expense management solution, including:

• Machine Learning. Machine learning algorithms are often used to automate expense categorization and analysis, reducing the need for manual data entry. Over time, these algorithms can adapt, learning to be more accurate in categorization and data interpretation.
• Mobile Apps. Apps are a great way to expedite the expense management process, especially for business travel. These apps can track expenses, scan and store receipts, complete expense reports and transmit data to other systems for categorization and reconciliation.
• Optical Character Recognition. While OCR may be a seemingly “old” technology,” its utility in AI expense management cannot be overstated. OCR has advanced greatly and can now read data more accurately and extract relevant information from receipts and invoices. OCR can read text in multiple languages and scan and take photos with highly accurate results
• Cloud Computing. With cloud technology, employees can access AI-powered expense management from anywhere, on any device, and at any time. Cloud storage of data and apps allows for access and use or expense management tools no matter who needs them and when. Cloud systems provide security and reliability, too

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The Future of AI Expense Management

As technology evolves, AI for expense management will continue to improve. The future of AI-powered expense management may offer:

• Paperless Expensing. Paper receipts and manual data entry are coming to an end soon. The increasing use of digital invoices and receipts and other paperless options are increasingly becoming the norm. AI can help scan and track digital copies of documents, resulting in reduced expenses for staffing, storage, and overhead. Plus, the reduction in paper waste will have a positive environmental impact.
   
• Blockchain Verification. Blockchain may completely transform how expenses are verified while dramatically reducing fraud. By using a verified ledger for all transactions, companies can ensure transactions are authentic, tracked properly, and verified, all while keeping data secure. This technology could result in simpler audit procedures and lower the risk of fraud.
   
• Employee Engagement. Employees often feel frustrated and encumbered by finance and expense policies they do not understand. With accurate and consistent application of policy via AI, companies can be more transparent and empower employees to be responsible with spending and compliant with policies.
   
• Global Growth. Companies often need expense management solutions that work across borders and currencies. Remaining compliant and accurate while working across the globe can be challenging, though. AI technologies can ensure accurate cross-regional operations, foster global growth, and drive regulatory compliance.

Read more about 2024 trends and predictions in this e-book.

AI is a powerful way to untangle the complexities and challenges of expense management. At SAP Concur, our AI-driven solutions help companies manage their expenses with ease and accuracy while driving efficiency and delivering better business outcomes. To learn more, contact us today.