Report: Average Enterprise Processes 4,374 Expense Reports, Each Containing Average of 11 Items

By:
Chris Gaetano
Published Date:
Jan 15, 2019
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A recent report has found that, in the final quarter last year, the average enterprise processed 4,374 expense reports, each of which contained an average of 11 items. The study, released by expense tracking company AppZen, based its conclusions on expense report data from hundreds of customer accounts in a variety of industries from October to December last year. Among these reports, 10 percent of expenses were flagged by companies as high risk, representing 33 percent of the total dollar value across all expenses. What exactly do the report's authors mean by high-risk? The report describes such expenses as either not compliant with company policy or as those flagged as potentially incorrect, wasteful or fraudulent. Extreme examples of noncompliant or wasteful spending that employees have tried to get expensed include tattoos, strip clubs, cigarettes, gambling, firearms, jewelry, dog kennels, shoe shines and "payments to politically-exposed people" (the report did not elaborate on what the last one meant). 

Not that unusual expenses were never approved among the reports examined. For example, reimbursement for rounds of golf were approved 39 percent of the time last year, gifts were reimbursed 46 percent of the time, and cellphone bills were reimbursed 41 percent of the time. On the other hand, if your car breaks down, don't expect your company to step in: only 3 percent of requests to be reimbursed for roadside assistance insurance have ever been approved. Other expenses rarely approved include bicycle maintenance (7 percent) and coffee card reloads (9 percent). 

Because of the high volume of expense reports processed every year, the study said auditors will find it challenging to root out problematic, high-risk reimbursements without the aid of sophisticated artificial intelligence (AI), which its authors coincidentally happen to offer. 

"Attempting to find the high-risk expenses manually across thousands of expense reports can be frustrating for auditors," said the report. "This is especially true if the organization cannot afford the reputational downside of certain types of spend being hidden away in employee expense reports. If reviewing all high-risk spend is a requirement, the math does not work in auditors’ favor: Sampling only 10 percent of spend when only 10 percent of expenses are high-risk yields a near-zero probability (5.7769042e-14, to be exact) that auditors will find all high-risk spend."

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