From Chaos To Control: AI And Expense Report Automation

There is a lot of buzz around the potential of AI to streamline financial operations — but can it solve the many pain points of expense reporting?

The traditional approach involves multiple steps and systems. Employees need to remember often complex spending policies, get every transaction approved, and produce the correct receipts. Not only does all of that take time, but it’s an inherently error-prone process, with about 19% containing errors, leading to potential internal fraud or fines from tax authorities​.

But forward-thinking companies no longer have to deal with these frustrations. When AI is incorporated into expense report automation, expense reporting becomes a touchless experience.

Let’s take a look at how a controller and a frequent business traveler have both transformed the way they manage expense reporting through AI and automation.

The need for better expense report automation.

Sonduren Fanarredha, Airbase Director of Product Marketing, has experienced expense reporting pain points from both sides of the desk. In his previous career as a corporate accountant, he found himself asking, “How do these people not know what our expense policies are?” when he dealt with non-compliant expense reports.

But now that he’s out in the field, he has a new understanding. “I’m out there trying to grow the business,” he says. “I don’t have time to find out, what are the rules? What are the policies?”

Kelly Hicks, Global Controller at Airbase, says she understands why employees struggle.

“A good corporate citizen wants to do the right thing. But it’s hard when employees have all these different tools, and they might not remember which tools they need to do what. That causes a lot of friction, especially in the global world we’re in today.”

But Kelly says the frustration of multiple systems isn’t just an employee problem. It’s something the finance department feels too.

“It’s hard when you’re dealing with multiple point solutions. You’re dealing with different user setups, different approval policies setups. It’s hard to pull data. You might get a very targeted question and have to pull that from multiple areas. It’s not an elegant solution.”

Employee adoption: One key to better expense reporting.

When employees don’t like to use a system, they’ll find workarounds. That leads to compliance leaks and a lack of visibility. It’s a dynamic that happens often with expense reporting software. In fact, a surprising number of employees just accept a loss instead of dealing with complex reimbursement systems.

Sonduren notes that rising user expectations have really highlighted the shortcomings of legacy expense reporting solutions.

“Any app that I’m using, it needs to know what I need. I’m used to everything being automated.”

That resistance puts controllers like Kelly in a tough position. She’s worked in businesses with poor adoption rates, and it’s led to friction, extra work, and weakened control. But it’s a tricky balance, because finance doesn’t believe it can overburden employees further.

“From a finance perspective, we need to think through that business partnership. We need controls, approvals, and receipt compliance. But it has to be easy for the user as well.”

AI to the rescue for expense reporting automation.

Sonduren sums up everyone’s frustration with the entire process: “Expense reporting software has just got to work. It’s got to do these things for me.”

That’s now possible with artificial intelligence (AI).

Airbase has always leveraged the powers of machine learning and optical character recognition (OCR) to extract information and autofill fields. AI helps to:

• Validate tax IDs.
• Detect fraud.
• Automate transaction coding.
• Provide document insights.
• Match POs and receipts.

Generative AI now transforms expense reporting. Users simply snap a picture of a receipt and let Airbase take over the expense reporting.

Here’s how it works:

• Take a photo of the receipt and forget it. You can do this through the Airbase mobile app or submit a photo of a receipt to Airbase.
• Airbase automatically funnels the receipts into the receipt inbox.
• In Airbase, you click on each receipt to add them to the expense report.
• All fields are populated by generative AI.
• Airbase creates the report.
• Airbase performs any currency conversion as needed.
• Airbase automatically selects the correct expense category.
• You can review and make any necessary changes before submitting.
• The report is automatically routed to the correct approvers.

The controller’s perspective.

By the time the approved expense report hits the finance team, the verification work has been done. The approval workflows and receipt compliance settings mean the transaction is clean and requires no questions at month end, all with a complete audit trail.

“My team has built robust controls and approval workflows within Airbase, reflecting the complexity needed for different types of spend. The integration with our ERP system ensures a smooth process, allowing us to close the books efficiently,” says Kelly.

Approvers can see the entire transaction history.

The future of expense report automation and AI.

As controller at a fast-moving fintech company, Kelly does a lot of alpha testing and works with the product team to test new features. She’s excited about planned enhancements. She also looks at the vendors she works with to make sure they’re keeping pace with new developments in AI. “That will help both of us grow and scale,” she says.

Don’t get left behind. Discover Airbase’s expense report automation. Book a demo with us!