Artificial Intelligence (AI) is poised to disrupt all aspects of our lives, both personal and professional, causing both excitement and apprehension. It goes without saying that AI will automate tasks that have long been dependent on humans. AI’s unprecedented speed, accuracy and cost efficiency are encouraging CFOs to consider its adoption in the Finance and Accounting functions. A recent research by Forrester says that Asian enterprises, especially those in India, are fast adapting AI to reinvent their business models. The adoption rate in India itself jumped from 29 percent to 69 percent between 2016 and 2017.
With technologies like AI, CFOs and Finance teams are able to get instant insights from huge volumes of data, optimize processes, save costs and support decision-making. In short, AI is gearing them to move towards the digital finance revolution.
Here are a few examples of how AI can enable CFOs to redefine traditional financial functions
a) Expense Claims Auditing – Financial teams across organizations have to audit the genuineness of expense claims submitted by employees and ensure that they are in line with company policies. In most organizations, this is still done manually. However, with increasing amount of data and more claims to audit, manual auditing can be time-consuming and prone to errors.
AI and automation technologies can accurately audit 100% of the claims with system-built company policies at unprecedented speed while sending only the questionable claims to managers and finance teams for corrective actions.
b) Fraud prevention and compliance – With growing number of scams, data thefts, inaccurate expense claims in organizations, compliance norms are becoming stringent. As per a research report by the Global Travel Business Association, 19% of all expense reports filed for overnight hotel stays contain some error. The research estimates that companies spend a substantial amount of money yearly finding and correcting such errors. Spending time in rectifying such inaccuracies not just costs more money but is also a huge wastage of productive time for the entire finance team. It can even get the organization into compliance issues, which could result in reputation loss for the company.
Artificial intelligence and automation solutions can spot errors instantaneously, assess fraudulent transactions better by keeping a track of account and transaction histories of employees, clients. Any unusual activity that is against company policies can be brought to the notice of the management and payment delayed or stopped entirely.
c) Travel Expense Management – Travel and entertainment (T&E) expenses form the largest share of organizational expenses and are the most challenging to manage. A combination of travel requisitions, locations, duration of stay and multitude travel advances compound the challenges further.
With Business travel expected to increase in the near future, it becomes all the more critical to bring AI and automation in this area of spend.
AI and Automation in travel expense management have made different processes of claims filing, approvals, allowances much more convenient for employees. AI will further be able to structure facts and information from different sources together into a central repository and help in drawing relevant travel insights for businesses.
d) Accounting – Unlike earlier, the role of a CFO and the finance team is not limited to ensuring the accuracy of accounting processes. While that is hygiene, a CFO is also expected to have answers for several business critical functions that support decision-making. He receives several calls regarding growth and profitability of different business units, revenue growth, contribution of different teams etc. By default, CFOs today are becoming data analysts in their respective organizations. According to a recent report by CFO Indicator, 76 percent of CFOs are tracking non-financial KPIs, which involve data integration to create a holistic view of the business.
AI or a digital assistant can make it possible to obtain data from ERP systems within few minutes and reduce the need for going through multiple excel sheets. It can make the process as simple as asking a Siri or Alexa about the weather forecast.
e) Invoice management – In a multinational organization managing multiple vendors for different functions, invoice clearing could be an enormous task for the finance department. Different vendors could use different formats to submit invoices, combine various invoices into one, or even miss out on critical details like mentioning invoice numbers. With the introduction of GST, this problem is more pronounced. An automated and AI driven process will address these issues easily.
The impact of technologies like Artificial Intelligence has just begun. With greater advancements, possibilities are immense. At Happay , we are trying our best to help CFOs harness the potential of such technologies and in turn, helping CFOs stay ahead of the curve.
Has the process of automation begun in your organization? Where do you see your organization in this journey towards implementing AI solutions? Do share your thoughts with us.