In 2020, three of the “Big Four” accounting firms announced plans to make billion-dollar investments in artificial intelligence (AI) and other data analytics products. This was important news for professionals, as it proves that widespread adoption of AI technology would help support daily finance management processes.
However, adopting AI to support financial management isn’t exclusive to large corporations. Small fintech startups are also considering implementing it, as it offers many benefits to finance departments. If the COVID-19 pandemic taught businesses anything, it was the growing need for automation. AI-powered finance management solutions could be a saving grace for companies looking to grow and succeed.
Here are five ways AI transforms finance management for businesses.
1. AI Automates Routine Tasks so Finance Managers Can Focus on More Meaningful Jobs
Finance experts that spend long hours manually entering numbers into software contribute to an overall loss of productivity. Finance professionals can focus on completing meaningful jobs when AI takes over some of the routine tasks like inputting data, chasing receipts, filing invoices, and processing reconciliations.
Professionals can engage in strategic, proactive financial modeling, analysis, and reporting rather than time-consuming, mundane workflows. Companies must keep their financial departments informed about their responsibilities once AI is implemented.
2. AI-Powered Solutions Ensure Compliance and Accuracy
Several manual processes in business finance management are crucial for accuracy and compliance. For example, bookkeeping is prone to human error, and many accounting processes, if not performed correctly, can lead to financial losses.
AI streamlines these processes and automates routine, repetitive tasks for finance managers. Data entry, invoice processing, and bill paying are only three examples of functions that can benefit from AI solutions. While AI can transform manual processes, it works best alongside human finance experts rather than as a total replacement.
3. AI Provides Business Leaders With Greater Insights for Improved, Data-Driven Decision-Making
Many AI solutions work in real-time, so business leaders have greater access to valuable financial insights. More access to data means companies can leverage it during negotiations, partnership decisions, and hiring processes.
The business environment is speeding up, and the companies that leverage AI solutions will be able to keep pace with their competitors.
4. AI Tools Support Corporate Fundraising Initiatives
Corporate fundraising plays a significant role in the nation’s economy. In 2019, research shows that these donations amounted to over $21 billion in the nonprofit sector. Many benefits can be reaped when companies get involved in philanthropic initiatives.
For example, it builds employee morale, helps local and global communities, improves the company’s image, and can help companies recruit from top talent pools.
5. AI Solutions Maximize Profitability and Efficiency
Based on valuable research from Accenture, AI can minimize friction that causes pain points in an organization, increase efficiency in terms of employee productivity and lead to higher profitability. Finance departments that use AI tools can benefit from significant cost savings.
Leveraging AI may include paying high upfront costs, but the benefits are too great for companies to ignore. Research from PwC suggests that companies avoid three major mistakes when computing the return on investment (ROI) for AI projects:
- Discounting the uncertainty of AI benefits
- Calculating ROI based on a specific point in time
- Treating AI projects individually
There’s no question that artificial intelligence (AI) is expected to grow rapidly and be adopted in various industries, from manufacturing to retail.
Finance Management Powered by AI Solutions
Harnessing the power of AI to improve common business processes can help companies succeed in their respective industries, and finance management is no exception. Remember that AI and its financial applications will continue to emerge and not be exclusive to large corporations. It is prepared to serve as a valuable tool in today’s businesses.