What about the approvers and auditors? With most expense reporting systems, they are pretty much on their own. The worst of it is matching receipts to transactions. Many organizations mandate a 100 percent audit. That means someone has to claim that he has associated a receipt with every expense report line item. Of those organizations with mandated audits, the vast majority mandate a zero percent audit of the approvers. Since receipt matchers know or at least suspect that their work is not being reviewed, well, people will be people. The effect is that an extremely poor job is done, but then again, it is the appearance of diligence that seems to matter more than the reality.
The reality should matter. Checking for receipts reduces both fraud and the chances that a tax audit will discover costly record-keeping deficiencies. According to Marcel Syriani, DATABASICS CTO, “Matching receipts is important but as a manual process it just doesn’t make sense anymore. Reviewer effort is a limited and expensive resource. It shouldn’t be wasted on low value, tedious tasks. Certainly, supervisors and managers have far better things to do.” Technology does have an answer: OCR. Receipts can be “read” automatically, then linked to the related line item in an expense report with a very high degree accuracy. As Syriani asks, “Why make people do something they do badly that automation can do extremely well?”
It’s unrealistic to rely upon reviewers to know all of a company’s policies and exceptions, to know what everything ought to cost and to have the expertise of a fraud examiner
And how would he detect a pattern of fraud where an employee is making up his own cab receipts? Syriani says, “It’s unrealistic to rely upon reviewers to know all of a company’s policies and exceptions, to know what everything ought to cost and to have the expertise of a fraud examiner.”
The real break-through in transaction review will come from AI, Syriani claims. “Reviewers will not be empowered so much as eliminated from the process. Reviews will be thorough, objective and most importantly, adaptive. Patterns at all levels will be detectable, and rules will be refined to single out exceptional transactions. All of this will happen without direct human participation. We’re not there yet, but reviewers should take heart that in not so long, they won’t have to look at another expense report.”