AI is already a part of our lives
AI refers to the ability of a machine to understand and deal with situations the way a human would. Algorithmic reasoning and artificial intelligence (AI) hold enormous potential and are likely to be economic blockbusters, and are poised to have a tsunami-like impact on business.
According to market research firm IDC, global spending on cognitive and AI systems will reach $57.6 billion and forecasts 75% of commercial enterprise apps will use AI by 2021. Accenture predicts that AI could boost rates of profitability by nearly 40 percent and lead to an economic increase of $14 trillion by 2035.
Why is AI needed in spend auditing
AI is moving from research environments to real-world decision environments, it goes from being a computer science challenge to becoming a business and societal challenge as well. Decades ago, adopting systems of governance and auditing helped ensure that businesses broadly reflected societal values. We are trying to replicate the same results through AI.
Modern finance teams are burdened with tedious, manual work. AI eliminates tedious tasks and gives time to prioritize higher impact responsibilities. Still, a majority of businesses haven’t employed AI in their workforce due to uncertainties around the business case or return on investment.
This lack of understanding is a growing issue for financial staff dealing with massive amounts of data. In the digital transformation era, clients are digitizing processes and increasing the number of spreadsheets and documents which the audit professionals must analyze.
Here are 3 broad areas of interest offered by AI in spend auditing:
1) Compliance: Artificial intelligence can be used to drastically reduce the time it takes to identify noncompliance issues referring to the violation of the FCPA, UK Bribery Act, Sunshine act, etc in the data. Purchase orders, employee receipts, travel bookings, and credit card transactions are automatically scanned for purchases made outside of policy — enabling auditors to quickly catch the error.
2) Spend reduction: Using AI we can audit 100 percent of spend reports. By predicting patterns and detecting a wide range of anomalies in the data, AI can help auditors catch fraudulent expenses before reimbursement occurs. Because it’s scalable, AI can also easily handle influxes in the data with the same level of accuracy. In fact, analyzing more data makes it smarter and better at tackling fraud.
3) Spend Behaviour: Instead of data being spread out over multiple documents, PDFs, and spreadsheets, artificial intelligence extracts data from receipt images, automatically classifies it based on the spend category and populates reports for analysis in one place. These comprehensive reports can provide businesses with smart insights to improve financial planning.
Corporate professionals are long overdue for a technology assistant. By leveraging AI-powered solutions, we can streamline data analyses and focus on more strategic functions for their clients.