Can A.I. solve expense reports?

February 22, 2023, 11:54 AM UTC
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Good morning,

Sure, many of us dread A.I. doing things like composing music, writing articles, or making art—you know, things humans actually seem to enjoy. But there’s one corporate task few wouldn’t mind handing over to A.I.: completing expense reports.

“We know expense reports are a necessity but, overall, business travelers hate doing them, and they take up a ton of time,” says Gunther Bright, EVP of global commercial services at American Express. “At the same time, every company has an increased need for control and compliance with expenses.”

A recently released American Express Trendex survey found some business travelers would literally rather have back-to-back virtual meetings all day or have their flight delayed and sit in the airport rather than go through the process of filing expense reports. And those in accounting who process travel and expenses (T&E) have grown tired of employees missing submission deadlines. 

Fifty-nine percent of T&E processors surveyed, who currently do not have a completely autonomous expense report management system, said the biggest benefit to having one would be saving time. And 94% said there needs to be more innovation. Meanwhile, more than half (54%) of business travelers said gathering and keeping track of receipts is an area of frustration, the survey found. The data is based on the sentiment of 1,000 business travelers and 300 T&E processors.

American Express is working with Microsoft on a solution for the automation of expense management using A.I. and machine learning. After an employee makes a purchase with an American Express corporate card, they’ll be prompted to upload a photo of their receipt. “Auditors will be aided by the A.I. engine, which will enable auto-approval decisioning and generate automated audit alerts for red flags or anomalies, such as personal or non-compliant spend, based on integrated expense policy, spend limits, and spend controls,” Bright says. 

Later this year, Microsoft will pilot the solution with its employees by integrating it into the company’s internal expense system. I asked Bright when the solution would be available to American Express corporate clients. An exact date and time hasn’t been set as they’re still in the early phases, he says.

Tech companies innovating in T&E reporting include Workday (CFO Daily sponsor) with Workday Expenses, where employees are able to scan receipts on their mobile device to automatically populate data on mobile expense reports. It also uses machine learning to analyze submitted expense reports and calculate risk scores. Every transaction is recorded for audit transparency, and analytics are used to inform manager approvals and administrative decisions.

The tech startup TripActions, renamed Navan, a travel, corporate card, and expense management company, is launching a new app that consolidates travel and expense offerings. With one app, users can search and book trips, change or cancel flights or hotels, and submit expenses, according to the company. Navan plans to incorporate OpenAI’s ChatGPT to expense reports.

Speaking of T&E, I asked Bright if there has been an increase in business travel for American Express corporate clients over the past year. “While we’re not yet back to 2019 T&E levels in our global and large, corporate client segment, T&E spending by these customers continued to recover in the fourth quarter of 2022,” he says. T&E spending in the commercial services segment, which includes large corporate clients and small- and medium-sized enterprises, increased 44% on an FX-adjusted basis in Q4 of 2022, Bright says. 

Many finance professionals don’t yet fully trust A.I. for all processes, according to Gartner. However, CFOs and their teams are leaning into A.I. for accounting processes like T&E.

“T&E is a great starting point to experiment with A.I. because the policies are generally rules-driven and straightforward,” says Marko Horvat, vice president of research in the Gartner Finance practice. “So it is easy for the finance team to follow along with what the A.I. is doing and build trust in the technology. And at the same time, having the technology deliver value through uncovering insights and flagging suspicious activity.”

Bright says, “We know our corporate clients are using A.I. more and more across their businesses.” The often “tedious, manual expense management process is a pain point that A.I. and machine learning can help solve,” he says.

As business travel picks up steam, it seems keeping traveling employees and accounting professionals happy when it comes to T&E would be wise.

See you tomorrow.

Sheryl Estrada

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Big deal

FTI Consulting has released its 2023 Global CFO Survey Report. The firm asked CFOs what areas they will be prioritizing for the next 18 months along with the challenges they're facing. Financial planning and analysis (FP&A) teams play a key role in support of the CFO. "In these uncertain times, there is heightened pressure on FP&A teams as forecasts on revenue, expenses, EBITDA, and other metrics are expected to be more robust," according to the report. However, companies are experiencing revenue forecasting challenges such as a lack of operational insights, demand volatility, supply chain disruption, and changing contract terms, the firm found. Meeting the increasing demands on FP&A requires companies to deploy enterprise performance management automation tools with a focus on data accuracy, incorporation of external data, underlying assumptions, and modeling key drivers, the firm advises. The findings are based on a global survey of more than 300 executives. 

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