How AI can help organisations keep finances in check

American Airlines saved thousands of dollars a year, simply by removing the single olive that was found in every passenger’s salad plate. Indeed, seemingly small expenditures can have an outsized impact overall.

The public sector can better manage its spending by ensuring that small expenditures, such as invoices and travel costs, are filed correctly. This process no longer needs to be done manually, as AI technology can help ensure that finances are in check.

Mark Wilfred, Director of Solutions Consulting, Southeast Asia, SAP Concur discusses the benefits of using AI tools in an often paper-based and laborious environment.

AI-approved accounting

The Rochester City School District in New York, USA adopted AI to simplify and speed up the work of its finance department. This team helps manage the travel expenses and invoices of the organisation’s 6,000 employees across its 57 schools.

Before AI, the district’s finance teams “manually reviewed reports, which involved identifying errors to mitigate potential fraud and risk”. This manual system was part of a paper-based IT system that it wanted to upgrade.

The organisation adopted AI tools to analyse and identify travel and expense finances that were not compliant with the organisation’s regulations. This new capability reduced travel and expense errors found in reports by 60 per cent, meaning fewer rejected reports.

AI tools also helped to analyse teacher’s invoices submitted by staff, faculty members and professors, such as when new classroom equipment was purchased. Automating this review process means that they are reimbursed within an average of 11 days, whereas previously it took 30-90 days.

The public sector’s common challenges

Challenges in expense reporting are not unique to Rochester City School District, they exist within Singapore’s public sector too. These challenges include cash leakage and the ability to control costs. Automation and AI tools allow finance teams to easily identify areas prone to cash leakages.

For example, an expense line item categorised as “miscellaneous” may indicate an expense that requires further clarification and investigation. The use of AI tools can flag potential non-compliant expenses to finance teams, so they can inspect it further before approval.

A headcount freeze is another challenge faced by Singapore’s public sector. This restriction on hiring means that public sector employees are expected to do more with the same number of staff.

Without AI it can take an employee 45 minutes to an hour to file an expense report, a large chunk of what is increasingly precious time. Adopting automated tools can cut this time in half.

Having to keep hardcopy receipts of expenses, which then require scanning, is one manual process faced by public sector staff. This is a laborious task, especially for those without a scanner at home.

This process is also inconvenient for finance teams. Employees often fail to label their receipts properly, meaning finance teams are left with “a big clerical exercise” to decipher the context behind expense and invoice submissions.

Adopting the AI tools

SAP Concur provides AI and Machine Learning tools to make processes like travel booking and expense auditing easier for staff. For example, public sector employees can scan or take photos of paper receipts and submit them digitally, using the SAP Concur mobile app.

The app can analyse photos of receipts and pick out the key information like the date, vendor, and amount. It can then upload this information into an expenses claim, speeding up the process and updating staff with the status of their expense claims.

To make submitting receipts even more convenient, SAP Concur has an ecosystem of partners automatically connected to its platform. For example, public sector employees using Grab can choose to have details of their trips automatically shared with the expense app.

This allows for business journeys to be conveniently recorded with minimal efforts from the user. These digital travel receipts also provide more context for finance teams, as they can record information like the pick up and drop off location, rather than simply recording the time and date.

Once these reports are submitted, AI can help review every receipt and flag up non-compliant expenses to auditors.

So, instead of reviewing 10 lines in the expense report, I as an auditor just need to review the one flagged item.

Compliance is of paramount importance in the public sector as mistakes can be costly. 

Consolidating all your data into one platform enables users to see every aspect of their spending. The technology can help finance teams avoid duplicate payments and unusual transactions while informing them of which purchases are the most cost-efficient.

Managing small expenditures is not as easy as removing an olive. Finance teams can use AI tools to keep an organisation’s finances in check, and reduce manual and slow processes along the way.

This article was first published on GovInsider. 

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