Yahoo Finance Strip clubs, bullets and tattoos: AI helps firms crack down on 'creative' expenses
Artificially intelligent auditors are helping companies crack down on “creative” expense reports, revealing questionable purchases like strip club visits, bullets and tattoos, according to a new report.
California-based AppZen uses AI technology to spot spending anomalies. The software can foil workers who submit doctored receipts to their employers, or use “brown paper bag” vendors to conceal what they’ve bought.
An analysis of nearly 1,000 expense reports filed in the final three months of 2018 found “high risk” expenses accounted for more than one-third of the total value expensed for the period.
Tattoos, strip clubs, cigarettes, gambling losses, guns and ammo, jewelry, dog kennels, shoe shines, and payments to “politically exposed people,” were among the non-compliant items submitted for reimbursement, according to AppZen.
The report found the average large company processed 4,374 expense reports in the final quarter of last year, each with an average of 11 items. AppZen notes the sheer volume makes manual detection virtually impossible, especially when shady expenses are well-hidden.
For example, employees have been known to buy economy class airline tickets for business travel and charge an upgrade to first class to their company card at the gate. Another scam involves adding funds to a personal coffee shop card when paying for meetings with clients.
“A well-defined spend policy clearly conveys a company’s expectations for what business activities can be reimbursed,” AppZen Co-founder and CEO Anant Kale wrote in a news release on Monday. “Auditing spend using AI helps ensure compliance to such a policy, while reducing spend and achieving more predictable financial results.”
AppZen’s clients include Amazon (AMZN), Citigroup Inc. (C), and Airbus SE (AIR.DE). The private company secured US$35 million in Series B funding from the venture capital firm Lightspeed Venture Partners in October.
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