Businesses can no longer rely on manual expense management solutions given the sheer amount and complexity of the data they deal with every day. This is why forward-thinking organisations implement automated systems for monitoring and reimbursing expenses, keep all receipts in cloud storage, and take advantage of AI tools to detect fraud in expense reports.
New technology solutions are now enhancing and, in some cases, even replacing the traditional methods of tracking receipts and spreadsheets in expense management.
What’s in store for expense management and what technologies are shaping its future? Keep reading to find out.
Using optical character recognition (OCR) technology lets you connect physical paperwork to a digital receipt or element. Accounting automation has so far been restricted to managing paper receipts or invoice collection but thanks to OCR, this has radically changed.
OCR can scan documents and convert them into various file formats. It transforms data in the form of a document, such as a PDF or JPEG, into a machine-compatible format. Once digitised, this data becomes simpler to search, alter, and save.
According to Gartner, by 2025, 70% of organisations will use technologies such as graph analytics, machine learning, AI, and blockchain as critical components of semantic modelling in financial planning and analysis.
But automation and artificial intelligence are already transforming expense management. AI-powered tools can scan receipts, classify spending, and even detect policy infractions, saving time and reducing errors. This not only speeds up the cost reporting process but also boosts compliance.
Blockchain has the potential to revolutionise expense verification and fraud prevention. Expenses can be safely and immutably recorded via blockchain, lowering the risk of fraud. Companies using blockchain can assure the validity and security of expense data by building an immutable ledger of all financial activities.
Industry experts predict that the use of blockchain technology will improve expense verification and transparency. Blockchain may soon give rise to solutions that streamline audits and lower the likelihood of bogus cost claims.
Manual sorting, human mistakes, and a lack of real-time updates are just a few of the issues that companies face when it comes to invoice and expense management.
This is where Large Language Models (LLMs) can make a significant impact. Solutions based on LLMs can automate invoice and cost sorting and categorisation since they can read, comprehend, and categorise texts, saving manual work and mistakes. Teams can use them to get immediate summaries and categorisations with real-time updates, including smooth integration into the existing accounting software.
Investing in expense management software is a smart move, particularly if your employees travel frequently. An expense management system provides real-time visibility into your expenses, allowing your company to make better decisions, develop policies, and save costs.
Modern tools allow companies to speed up many key aspects of expense management, such as:
By connecting the expense management system with enterprise resource planning (ERP), human resource management, or accounting software, organisations can step into the next level of integrated expense control.
Big data analytics built into expense management give real-time insight into corporate spending that allows tracking expenses by employee, project, and category, detecting wasteful spending trends, and making better-informed decisions.
Detecting expense fraud and reporting claims that may violate T&E policy has traditionally been a time-consuming and labour-intensive process. AI is a game-changer when it comes to controlling expense fraud. It not only reduces the workload but also increases accuracy and predicts dangers based on previous trends.
Furthermore, AI can examine massive volumes of cost records in real-time, allowing reimbursements to be assessed instantly in the event of any red flags. No wonder AI is projected to become dominant in spending management over time, bringing extraordinary speed and accuracy to this industry.
Virtual payments (also called online or electronic payments) have grown in popularity in recent years. With the advent of e-commerce and mobile technologies, more consumers have turned to online payments as a quick and safe method of completing transactions.
Organisations enjoy many advantages by switching to online payments, such as improved cash flow and faster payments.
But one of the most important pros is the fact that payment matching is done automatically. Matching payments with their associated invoices or receipts is a vital element of bookkeeping. This can be time-consuming and costly when done manually.
Recent advances in online payments have also enhanced their security with PCI (Payment Card Industry) data compliance guidelines for avoiding fraud and data breaches, immediate data encryption, 3D-Secure (3DS) mechanism, and more.
The Internet of Things (IoT) impacts many sectors, and IoT device management solutions can streamline the invoicing and billing process. They reduce the time and effort necessary to handle invoices, pay suppliers, make data-driven cost decisions, and optimise spending.
Expense data must be full, transparent, assigned correctly, and updated in real time. This is what modern IoT tools enable for expense tracking. Using features like automatic payments and proactive monitoring helps to prevent unforeseen difficulties and slashes the risk of downtime and non-payment fines.
Data analytics and real-time reporting will gain popularity in the coming years, providing finance teams with insights into expense trends to aid in proactive decision-making and cost management. Digitisation and automation will remain key areas of attention to continually improve manual labour processes and reduce the risk of mistakes.
The expense management landscape will witness – and be affected by - pivotal trends in the near future, such as AI, machine learning, blockchain, and OCR. As AI-powered technologies simplify expenditure reporting, decrease administrative chores, and increase accuracy, automation will take centre stage.