Chief Financial Officers (CFOs) are embracing the call from their CEOs and board members to take a more strategic role in the business – from being more involved in environmental, social and governance (ESG) initiatives to diversity, equity, and inclusion (DEI) initiatives – to spearheading digital transformation to shape the future of the business.
However, the CFO’s traditional role of financial scorekeeping, regulatory reporting, and cost optimisation is just as crucial as ever in light of chronic inflation, slow economic growth, and a heavier compliance burden. Forward-thinking CFOs increasingly seek new technologies like artificial intelligence (AI) to co-pilot this complex landscape.
Many finance teams are already investing in intelligent automation and AI to reduce the burden of manual business processes for the finance team. Early adopters are already putting AI to work to automate and accelerate repetitive, manual tasks such as data entry, reconciliations, and exception management.
Reducing manual labour and human error
AI excels at these tasks, crunching through numbers and mining massive volumes of financial data for actionable insights faster than a human employee—and without making errors. This takes the enormous strain off the finance team, relieving them of much of the need to wrangle multiple messy spreadsheets or to compile quarterly or annual reports for business stakeholders manually.
But elevating automation to new heights is just the start. AI also enables finance teams to move towards a more real-time and continuous operating mode, compared to older models that focus on weekly, quarterly, or annual closes. This is what analysts such as Gartner call ‘autonomous finance’—where self-learning software manages many core and basic finance processes with little need for human intervention.
AI-powered finance systems will continuously pull data from transactional records and customer databases to provide a wealth of insights. They will also check for irregularities and flag potential problems and opportunities, reducing the time finance teams need to spend on manual internal audits and error identification.
Today, a CFO can easily pull up the latest figures if the CEO wants an up-to-the-second read on the company’s performance or to run forecasts or scenarios for the board. They can easily tap into real-time data, analyse it at a high or granular level of detail, slice, and dice data, and use AI/machine learning algorithms to deliver meaningful, actionable, predictive insights.
AI-generated insights transform financial reporting
The net outcome is that CFOs and their teams can embrace their roles as strategic advisors and data storytellers to the broader business. Instead of wasting time tediously producing reports or poring through spreadsheets to spot errors, they may concentrate on the financial data’s narrative about the company. AI allows finance teams to access vast new resources of time and intelligence.
For example, they can leverage data-driven insights to develop convincing narratives around solar energy integration within the ESG strategy by reducing expenses to deliver a productivity lift. Or they might be able to offer powerful visualisations of how an investment in salespeople is forecasted to drive an outsized ROI in a year.
The next wave is here: Generative AI
Generative AI could emerge as a powerful ally for financial teams moving ahead. Generative AI solutions like DALL·E and ChatGPT generate content such as images, music, speech, code, video, or text by learning from and interpreting massive datasets. This could be a boon for data storytelling, enabling finance teams to accelerate the creation of reports and presentations.
For example, a CFO could ask an AI-enabled dashboard to generate a graph and some text about the current cash flow position. Another exciting possibility lies in using generative AI to link tasks in a workflow, instructing the system using natural language terms intuitive to a human. The tech is immature, and its output needs to be checked carefully, but it could be a timesaver for some applications.
AI promises to change finance as dramatically as other professions over the next three to five years, especially as AI features embedded into financial and accounting software become richer and more mature. Gartner predicts that organisations will require a combination of technical and business skills that many finance teams don’t have today to make the most of the shift.
Finance leaders’ success as leaders depends on their ability to turn financial data into narratives that articulate the future of their businesses with clarity and foresight. But the good news is that AI can be a useful partner in making sense of data and automating routine processes—enabling finance professionals to focus on uncovering the insights that will help their businesses grow.
- Jordaan Burger, Vice President of Finance for Sage Africa, Middle East, and Asia-Pacific
