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Eliminate the Headaches & Cost of Expense Reporting and Auditing – Using A.I (AppZen, Jonathan Chizick)

By June 19, 2017 No Comments

AppZen Head of Marketing, Jonathan Chizick speaking with Justin Jones about using A.I to Automate Expense Reporting & Auditing

SHORT RECAP

Learn More About AppZen

Justin Jones spoke with Jonathan Chizick the head of marketing for a company called AppZen. The company uses powerful Artificial Intelligence to help with expense report creation, compliance and auditing. Using AppZen you can literally save companies hundreds of hours and a lot of money.

TIMELINE

02:34 Jonathan Chizick Background
05:02 AppZen Overview
07:05 AppZen Value Proposition
10:34 AppZen Proprietary Technology
14:44 Quick Implementation with Immediate Results
17:50 Who Uses AppZen
21:10 A.I Trends
26:38 A.I Predictions

KEY POINTS

  • AppZen developed the world’s first artificial intelligence (AI) solution for back office automation.
  • Machines allow us to automate many of the time-consuming, expensive human driven processes within an organization. Not only does it do it faster, but more accurately and in more detail.
  • Future Trend. I believe you’ll see a significant reduction in the offshoring of back office business processes. There’s a big shift that started about 20 years ago, where companies would offshore services in search of lower labor costs – resulting in a race to the bottom to find cheaper sources. With A.I, it doesn’t matter where it’s done. You can keep it within your own company, your own country, within your own data centers … and suddenly you don’t have to worry about data privacy like you did in the past. Companies also realize that there is a lot of overhead with managing these offices and contractors around the world, and with technology like AppZen they can eliminate these headaches.

TRANSCRIPT

Justin Jones: I had the pleasure of speaking with Jonathan Chizick the head of marketing for a company called AppZen. The company uses powerful Artificial Intelligence to help with expense report creation, compliance and auditing. Using AppZen you can literally save companies hundreds of hours and a lot of money.

Jonathan please share a little bit about your background, what you’re doing and how you ended up working with AppZen to help take their business to the next level?

Jonathan Chizick: Before AppZen, I had about 15 years engineering and marketing experience at large global companies like Ford, Dell, and Samsung. I’ve been leveraging this experience over the last five years in helping startups in ecosystems like 500 Startups – this is where I first met the founders of AppZen.

I’ve now been with AppZen just over a year, and being one of their first business hires I’ve had the opportunity to implement a sales and marketing platform to help the company grow.

Justin Jones: Where do you find startups need the most help?

Jonathan Chizick: Everywhere, however I mostly focus on making sure that the startup is closely aligned with their customers – so product-market fit. But what is product-market fit; this is where you have to talk to your customers and see how they’re using your betas your prototypes in order to determine whether your product does in fact fit the market. If startups are not already talking to customers to better understand their pain points, then that’s a red flag.

Justin Jones: Are you doing something similar with AppZen?

Jonathan Chizick: That is one part of what I cover. When I first met the founders of AppZen they were already in the process of transitioning from one model to the next and tightly aligned with customers. It was very exciting to hear what they were planning and had me hooked from day one. The fact that they were attacking an area of business (back office) typically ignored by a lot of other companies …. and already working with some very large enterprises, that really excited me.

Justin Jones: I assume AppZen saves companies a lot of time through automating expense reporting using Artificial Intelligence?

Jonathan Chizick: If you look at the traditional user facing portion of expense processing, where employees put their expenses into something, anywhere from Excel to paper spreadsheets – that is very time consuming. Companies like Concur and Oracle have already begun moving beyond the traditional time-consuming processes by introducing expense capture tools which has made it a lot easier for employees to capture and report expenses.

If you think back 15 or 20 years, filling out expense reports on spreadsheets and stuffing envelopes with receipts, mailing them in, and then waiting six weeks to get paid. The process is much easier today as some companies have transitioned.

This is where AppZen started, we created a Chatbot to help create expense reports. But through that process of talking with customers we realized that there were some processes that hadn’t changed years. The only way for these companies to get more efficient was to try to find ways to do the same thing more cost-effectively. Which typically meant either doing less of it or offshoring it, or some combination of the two. There was no way to cost effectively audit 100 percent of all expense reports with the level of detail and accuracy required.

Even when they would offshore they would typically be limited in the things they we’re going to check or use random sampling to check; say 15 percent of our reports.

Perhaps they had some threshold for costs against particular items. Anything over this threshold would automatically get checked, which would consist of things like verifying receipts. In other words, someone had to sit in an office and go through the sheet all day long just looking at a computer screen matching receipts. Does the name on the receipt match the name on the expense report?

For us, it just seemed that processes like this needed to be automated. Machines could do this. Not only faster, but more accurately and in more detail. Today we see that companies using our tool are catching up to 10 times more fraud and compliance issues, while simultaneously reducing the costs for audits by up to 80 percent. It’s streamlining the whole process of making companies more compliant.

Justin Jones: Do you leverage third party A.I platforms like Watson or is AppZen A.I proprietary?

Jonathan Chizick: It’s all proprietary. This is where the real value comes, using a combination of different variations of A.I. As you know, A.I comes in many different forms. Machine learning, computer vision and natural language processing to mention a few. But what we’ve done is find different combinations of those tools that deliver on the specific use cases. We have a patent on our ReceiptIQ technology, which is similar to OCR in that it can look at any sort of document and figure out what’s on it.

But typical OCR would just look for certain fields and match those fields to online text. What ReceiptIQ does is look at everything that’s on that image and then use natural language processing to figure out what it is? Is this even the right receipt? Then we look at all the basic stuff that you typically get with OCR, the amount, the dates, the name of the merchant. ReceiptIQ then takes it to the next level by looking at what else was purchased. For example, how many people were in the lunch party and then going off and searching. What does that mean? Is this within your company policy or not. If this expense involves something that’s outside of your policy, then it can flagged for the auditors to review.

ReceiptIQ does some very smart work. For example, referencing the number of people at the table and how many had a meal. Say an employee submits an expense where our tool knows that the typical meal at a particular restaurant ranges 30 to 50 dollars … and the employee is submitting an expense for about $100 per person. This would indicate that the expense is far outside of the range, suggesting something else is probably going on there.

The tool also catches honest mistakes where people forgot to write down the client’s name, which is required for tax purposes. Given enough time and money, humans could also do this, but would require going and looking at every single document, doing a Google search for a merchant and then repeating this for every item on every receipt – ‘connecting all the dots’. It would take a ridiculous amount of time for people to do this, but AppZen can do it in minutes.

Justin Jones: How much of this technology is ready to use out of the box.

Jonathan Chizick: There’s enough for all of the standard policy checks. If the company has indicated that they have something more unique in terms of policies etc. then we will require a little extra training – it’s all part of our standard customization and implementation. It takes about 2 weeks as we already have connectors with many major ERP systems like Oracle. We connect the companies expense management software to AppZen and it will start pulling data right away and then we’ll optimize for accuracy.

Justin Jones: What size companies use AppZen?

Jonathan Chizick: We typically see larger enterprises use the tool as they understand and appreciate the value and time saved using AppZen versus the traditional methods like random sampling. These companies experience significantly greater efficiency and greater accuracy, all at a lower cost.

AppZen also works with small companies but we typically see that small companies have other priorities – the pain and cost of auditing expenses isn’t as high as bigger companies. If you have 10 expense reporting employees or more, then AppZen can help.

Justin Jones: I image that companies who use AppZen would see an immediate Return on Investment (ROI)?

Jonathan Chizick: Definitely. For example, one of our customers upon completing AppZen’s implementation, experienced an immediate 45 percent reduction in auditing expenses and saw data results within minutes – not the usual days it used to take.

Justin Jones: Being located in the Bay Area – is there a particular A.I trend that jumps out at you?

Jonathan Chizick: One trend I see is that suddenly everything is positioned as A.I. Everybody’s calling what they have as Artificial Intelligence, so figuring out who actually has A.I has become more difficult.

I’m so excited about tools like AppZen that are automating every day, time-consuming processes. People don’t necessarily want to do these tasks, and tend to always be looking for shortcuts. I see more of this automation happening – A.I replacing those essential processes that consume peoples time and cost companies money. Technology can perform these tasks a lot quicker, more accurately and more cost-effectively. But equally important, freeing up employees to focus on higher value activities within the organization.

If you’re an enterprise looking to implement Artificial Intelligence I would suggest looking at specific use cases or processes within your company – really focus of testing a narrow set. Success is more likely this way as oppose trying to transform all your accounting processes through a specific A.I tool – this is a massive, higher-risk undertaking that could take years to implement and perfect.

Whereas with a tool like AppZen, you can start automating a tiny piece of your business, in this case expense auditing. There are other things AppZen can do – but start small, get comfortable with the technology, experience the results and then slowly and steadily add A.I to other aspects of accounting or your business processes in general.

Justin Jones: So companies that are new to Artificial Intelligence are probably better off applying ‘out-of-the-box’ type solutions that perform a specific, clearly define process as oppose large custom implementations. Custom implementations could take years and cost you a fortune. Start small, learn and then build from there.

What do you predict for the future of Artificial Intelligence?

Jonathan Chizick: Being in the Bay Area I’m really looking forward to more autonomous vehicles so I can get some work done during my long commute.

Seriously, I believe you’ll see a significant reduction in the offshoring of back office business processes. There’s a big shift that started about 20 years ago, where companies would offshore services in search of lower labor costs – resulting in a race to the bottom to find cheaper sources. With A.I, it doesn’t matter where it’s done.

You can keep it within your own company, your own country, within your own data centers … and suddenly you don’t have to worry about data privacy like you did in the past. There’s a lot of issues associated with transmitting data around the world that suddenly you won’t have to deal with. Companies also realize that there is a lot of overhead with managing these offices and contractors around the world, and with technology like AppZen they can eliminate these headaches.

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