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AI-Powered T&E Expense Audit

Business Need​

Automate the complex process of auditing travel and entertainment expense reports by matching receipts to expense items, applying company policy rules across 40+ expense categories, and generating approval decisions with clear reasoning for each line item.

Solution Overview​

This solution leverages AI Workflows to deliver comprehensive expense audit automation:

Step 1: Document Ingestion & OCR

  • Data Source: Expense reports submitted through the company's expense management system via the API
  • Document Types: Receipt images (JPEG, PNG), PDF expense forms, and supporting documentation
  • Processing: Advanced OCR extracts text, amounts, dates, merchant names, and line item details from receipts

Step 2: Receipt Matching & Classification

The AI Workflow performs intelligent matching and categorization:

  • Matches individual receipts to specific expense line items using amount, date, and merchant correlation
  • Classifies expenses into 40+ categories (meals, lodging, airfare, ground transportation, etc.)
  • Identifies split expenses and handles multi-line receipts
  • Flags missing or duplicate receipts
💡Pro Tip

Train the system on historical audit decisions for your specific company policies. The AI learns to identify edge cases and gray areas that frequently require human judgment.

Step 3: Policy Rule Application

Complex audit rules are applied automatically:

  • Per diem limits and geographic-specific policies
  • Itemized receipt requirements based on amount thresholds
  • Business purpose and attendee requirements for entertainment
  • Restricted expense categories and prohibited vendors

Step 4: Decision Generation

For each line item, the workflow generates:

  • Decision: Approve, Hold (requires clarification), or Reject
  • Reasoning: Clear, human-readable explanation of the decision (using a predefined sets of reasons.)

How It's Used in Practice​

This solution operates as a real-time API service integrated into the expense management system:

Automated Audit Pipeline:

  • Employee submits expense report through existing system
  • System calls Abacus AI Workflow API with expense data and receipt images daily
  • Results are displayed to employee and approving manager with clear reasoning

Audit Outcomes:

  • Auto-Approved (65% of line items): Expenses that fully comply with policy
  • Hold for Review (25% of line items): Require clarification or additional documentation
  • Auto-Rejected (10% of line items): Clear policy violations with explanation

The system processes thousands of expense line items per month with consistent application of company policies.

✨Key Outcomes

Key achievements:

⚡ 85% reduction in audit processing time​

Manual audits that took 3-5 days now complete in under 1 minute

💰 Saved precious time from the audit team​

Auditors focus on complex cases and policy exceptions

📊 100% policy consistency​

Every expense evaluated against all 40+ rule categories without human oversight gaps

Additional Information​