Even a few small errors in employee expense claims can
quietly cost companies millions. Data from Rydoo, an expense management
software provider, shows that firms are overpaying on employee reimbursements
by 5–14% on average.
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While most expense submissions follow policy, gaps in
manual review processes allow costly errors and even deliberate fraud to slip
through. Rydoo analyzed over 10 million expense claims through
its Smart Audit module, which uses AI to detect non-compliance.
Non-Compliance Drains Money and Time
The findings reveal that 86% of expenses comply with
company policy, leaving 14% of claims at risk. This 14% includes both errors,
such as misclassified or incomplete claims, and intentional actions like
duplicates or falsified receipts.
Left unchecked, these claims inflate operating costs
and reduce potential VAT recovery. Manual expense reviews compound the problem.
A mid-sized company of around 650 employees could spend 2,300 hours annually
checking claims, yet still miss repeat patterns or anomalies.
“Advanced AI audit solutions can close control gaps by
enabling finance teams to automatically review every claim in real-time and
apply policy consistently, while maintaining human oversight where it adds
value,” said Sebastien Marchon, CEO of Rydoo. “With meaningful time and cost saving benefits, companies
that fail to embrace technology in expense management will fall behind.”
Artificial intelligence is changing the way finance
teams approach expense compliance. By analyzing 100% of claims in real time
with roughly 97% accuracy, AI flags anomalies automatically.
From Detection to Intelligent Governance
Low-risk, recurring claims—around 70% of
submissions—can be processed without human intervention, freeing finance staff
to focus on exceptions and higher-risk cases. AI not only improves accuracy but also reduces the
hours spent on manual checks, improving operational efficiency across finance
teams.
With AI embedded in platforms, finance teams can shift
from periodic auditing to continuous assurance, combining real-time monitoring
with human-in-the-loop oversight. This approach ensures policy compliance while
giving employees faster processing of legitimate claims.
While AI helps control compliance, it also creates new
challenges. Fake receipts generated by AI tools and manipulated claims using
simple software are becoming more sophisticated, making traditional manual
audits increasingly insufficient. Marchon warns that 30% of expense fraud could be
AI-generated in the near future, highlighting the need for technology-driven
detection systems.
Real Savings and Strategic Value
Automation isn’t just about preventing overpayments.
Rydoo’s data shows that around 70% of low-risk claims—like subscriptions,
commute allowances, and routine purchases—can be processed end-to-end
automatically.
This saves hundreds of hours per year and improves the
consistency of reviews. High-value or ambiguous expenses still benefit from
human oversight, allowing finance teams to focus on strategic, high-impact
work.
This article was written by Jared Kirui at www.financemagnates.com.
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