In the world of finance and accounting, Artificial Intelligence (AI) is helping finance professionals keep tabs on, spend, save, and invest their business’ money in the most efficient and secure way possible while maintaining access to sensitive financial information through uncompromised cybersecurity measures.
During the height of the pandemic, many CFOs accelerated their adoption of AI through Cloud accounting technology which saw increased user acceptance along with a shift in regulatory frameworks as finance teams began working remotely.
Our Advanced Business Trends 2021/22 survey reported that 70% of CFOs have seen limitations in their organisation’s current technology to support remote and hybrid working. However, when asked what their business priorities were going to be over the next 12 months, technology held the lowest score with only 1 in 5 CFOs deeming this as a priority.
The top scoring business priorities for CFOs were:
- Business growth and development (62%)
- Employee retention and development (49%)
- Cyber security (41%)
- Remote, hybrid and flexible working (40%)
Without the adoption of AI through Cloud accounting software, CFOs will face challenges in ensuring business growth and development when pitted against competitors already on the Cloud.
By utilising the features of AI, today's finance functions can automate manual tasks, such as reporting, while greatly improving the accuracy of the data, thus supporting more efficient Financial Planning and Analysis (FP&A) that is based on a single source of truth available in the Cloud.
What’s more, your competitors are sure to adopt AI in the near future, as AI, data science, and machine learning will continue to transform and shape the future of finance and accounting.
If AI in finance and accounting is a new concept for you, here are some essential terms to get you up to speed:
- Artificial Intelligence (AI) - The use of logic and analytics helps computers interpret information and make decisions like humans.
- Machine Learning (ML) - This technology allows computers to learn from a set of data points and make decisions without human intervention.
- Robotic Process Automation (RPA) - Automation of routine manual processes and rules-based activities, like downloading an attachment, scanning the contents, and entering the information into a form.
- Natural Language Processing (NLP) - Provides chatbots and virtual assistants, such as Alexa and Siri, with the ability to understand human speech, including contextualised requests and sentences.
- Predictive analytics - Determines what scenarios are most likely to happen in the future based on past data.
- Data visualisation - Creates charts, graphs, and dashboards to represent data.
What is the role of AI in accounting and finance?
It's easy to get caught up in the negative press coverage and online commentary surrounding the rise of Artificial Intelligence (AI). AI may even be viewed as a threat to jobs when first introduced into a business.
However, AI does represent an opportunity to reduce the workload of finance professionals, especially around the cornerstones of traditional activities. Among them are transaction processing, audits, reporting, and remaining in compliance with regulations such as Making Tax Digital. In their current form, these activities prevent the CFO and the finance function from being strategic business partners.
Implementing AI solutions, such as Cloud accounting software, can transform the way finances teams operate through:
- AI based chatbots
- Automating tasks
- Detecting fraud
- Delivering personalized recommendations
- Enabling frictionless, 24/7 customer interactions
- Reducing the need for repetitive work
- Lowering false positives and human error
- Saving money
Inviting finance teams to participate in the launch process can help CFOs prevent negative impressions. Finance professionals don't need to hold advanced degrees in computer engineering to harness the potential of AI and Cloud accounting software.
We recommend holding employee training sessions to teach them how AI can reduce monotonous tasks and create more time for enjoyable and higher-value work.
How is AI expected to change the future of finance?
When correctly implemented, resource-intensive and repetitive tasks like data entry and transaction processing, are good candidates for automation.
It is important for CFOs to examine areas of inefficient resource consumption and unproductive processes to identify automatable opportunities. Activities that fall into this category include planning, budgeting, and forecasting, financial reporting, operational accounting, and reconciliation.
Far from the idea of the elimination of the workforce, a new picture is emerging of a stronger, more strategic finance operation, enabled by new technologies, but still heavily dependent on a skilled finance team.
Automation of manual tasks
With legacy accounting software, finance teams are quickly overwhelmed with tedious tasks like filling out spreadsheets, reconciling data, and preparing reports manually.
The good news is that AI can handle repetitive tasks like these effortlessly. This results in cost savings, time given back to finance teams and increased workplace productivity for organisations.
In addition, Gen Z will be the next generation of talent entering the finance and accounting job market. Having grown up surrounded by technology, they will expect organisations to have AI-enabled technology at their disposal.
More time for value-adding work
Currently AI technology is unable to fully match human intelligence, especially when it comes to so-called "insight problems," which involve irrational, creative, or inconsistent thinking.
However, through the automation of repetitive tasks, employees have more time to focus on the high-value work humans were meant to do. This involves solving complex problems, making informed decisions, and building strong relationships with colleagues and customers.
By leveraging AI, finance teams can spend less time on spreadsheets and more time on strategy. With AI crunching growing volumes of data, finance teams have more time to work on value-adding projects and develop soft skills like agile decision-making, problem-solving and business-wide communication.
Scenario modelling in real-time
Finance functions everywhere are experiencing data overload while reporting deadlines are getting tighter and more frequent. With all this coming as a result of the pandemic, business leaders also expect weekly or even daily updates to scenarios, budgets, and forecasts. In order to get the job done, companies have two options: hire more employees or invest in Cloud accounting technology.
If your finance team lacks the right tools, they will work late into the night, which results in lower employee satisfaction and retention. Plus, your executives won't have the financial insights they need to make better decisions at the speed they now demand.
Thanks to the Cloud and virtually limitless processing power, multi-layered and complex scenarios can be generated in seconds. By providing solid, reliable, and timely business intelligence, CFOs can guide the C-Suite in adjusting operations and redesigning a business model to meet the constantly changing demands of today's markets.
Reduce human error
Human error is rare in AI: it will never make a typo, calculate a figure incorrectly, or take a break. A company that relies on monotonous manual labor and outdated, clunky software is bound to cause errors. Finance teams can no longer manage incoming data manually at a faster turnaround as their organisation scales - all while inbound data collection continues to increase.
With AI, errors like budget padding can be detected at a granular level alongside other potential abnormalities which are then flagged for review by an employee. In other words, instead of combing through a set of data for errors, AI will highlight only the potential ones and save time by notifying employees to check flagged data.
Recognising the potential of your workforce
As AI is a relatively new technology being introduced into organisations, employees from all walks of life have the equal opportunity to learn, become experts and accelerate the progression of their careers.
What's more, for talented individuals from traditionally underrepresented backgrounds, AI in finance represents an opportunity to enter the field or advance it.
Here are some of the benefits companies stand to gain from introducing AI training and internship programs:
- Increase the diversity of their workforce and leadership
- Discover new talent and retain Gen Z in finance
- Identify and mitigate the real issue of bias in AI algorithms
How can your business benefit from AI?
According to our annual Advanced Business Trends 2021/22 survey, only 37% of employees rely on AI technology and 37% rely on automation during their working day. These numbers are likely to rise over the next year as businesses continue to invest in digital transformation through Cloud adoption.
Artificial Intelligence (AI) and automation, which are inherent to many Cloud-based solutions, allow employees to save time on repetitive administrative tasks, freeing up their time for more creative and problem-solving tasks. Businesses can get a much better return on their employees' time, which in turn boosts productivity.
Cloud-based digital solutions that use AI and automation can significantly increase productivity wherever people are working. Using automated form-filling software and workflows that move the user through a task quickly can reduce time-consuming and repetitive administration.
By focusing on higher-yielding tasks, employees will have more time to work on wider challenges, including strategy or developing innovative solutions to problems.
Nugent Care, the largest education, health and social care charity in Liverpool adopted Advanced Financials with the drive to save time for their finance department:
“We were introduced to Advanced Financials by our account manager at Advanced and were impressed by how user-friendly the solution was. The product fits with our Cloud-first strategy and we love that it is a Software-as-a-Service model. From the price to the support and the scalability of the solution, we could see it was perfect for us.” - Julia Shaw, Head of Finance at Nugent Care
In a nutshell, now is the time for executives to work with CFOs and the C-Suite to identify areas where automation could transform their organisation. This will also determine how to unlock the value and potential of AI, and guarantee business success today and in the future.
Step into the future of success
Financial services are one of the most affected by automation, so CFOs must remember that any technology will always be as good as the people using it. The key to future success in finance will be determined by striking the right balance between emerging technologies and an organisation's most important asset - its people.
Our expertise in AI, Machine Learning (ML) and Data Services at Advanced allows us to help you turn your data into your company's greatest asset and ensure that it's used to its maximum potential. We also specialize in Business Intelligence (BI) projects and can work with you to create the right solution to meet your business needs.
Factor in the powerful capabilities of our Cloud accounting software, Advanced Financials, and your finance department becomes a strategic and value-driven powerhouse for your organisation now and well on its way to becoming even more successful tomorrow.