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Technology

How Artificial Intelligence Can Transform Finance Departments Seeking Agility

How Artificial Intelligence Can Transform Finance Departments Seeking Agility 3

How Artificial Intelligence Can Transform Finance Departments Seeking Agility 4By Dan Drees, Chief Growth Officer of AvidXchange

It’s no secret that agile companies, those that can quickly respond and pivot when necessary, fare better than those that falter when faced with uncertainty or change.

A recent IDC global report shows that agile companies experience higher profits, revenue growth and impressive market share gains. They also have stronger employee retention rates, faster time to market and better customer experiences.

Yet, being able to adapt to change and successfully deal with the unexpected requires a steadfast focus on the future, and many organizations today are too bogged down with the here-and-now to focus on what lies ahead.

As company leaders increasingly search for ways to achieve agility and future-proof their businesses, automation technology is becoming a key initiative. Data-driven solutions that leverage powerful artificial intelligence (AI) and machine learning (ML) can help them more readily adapt to change, seize competitive advantages and better ensure a more profitable future.

The finance department, charged with overseeing bottom line results and ensuring a strong future, is specifically ripe for the modernization AI provides. This is becoming clearer to finance leaders, as nearly two-thirds of CFOs surveyed in a WorkDay CFO Indicator Report revealed they are investing in cloud-based AI to “reimagine” their finance departments during these trying times.

AI technology automates the financial tasks that dominate their work, saving significant time and costs while providing valuable insights into the state of the business and its future. It also frees teams for more strategic work when their organizations need them most.

Here’s a closer look at three powerful things automation and AI can do for the finance department to help organizations stay nimble and get ahead:

  1. Automation can make finance work more attractive for employees, empowering them to focus on the more strategic aspects of their jobs

According to UiPath’s 2021 Office Worker Survey, more than two-thirds of office workers feel they are constantly doing the same tasks repeatedly, wasting, an average of four and a half hours a week on tasks they think could be automated. That time is not only taking a toll on the bottom line, but also diminishing job satisfaction, which isn’t good for retention.

Financial performance, growth and cost management may be top priorities for CFOs in 2022, but according to a Deloitte survey, retaining and hiring talent is an even bigger priority.

Modernizing the finance department with AI can aid retention efforts by freeing professionals from labor intensive tasks—like data entry, chasing approvals and mailing paper checks—and empowering them to take on more strategic roles within their organizations. By elevating their roles and enabling time for more rewarding tasks, employees are more likely to stick around and new hires may flock to join them.

  1. AI can help reduce the likelihood of human errors, saving time and costs spent on fixes

Manual, paper-based processes like those around processing invoices and paying bills are inevitably prone to human errors. With burgeoning workloads to process, it’s easy to see how files can be misplaced or how data entry errors, such as transposing numbers, can include incorrect decimal points or key information in the wrong fields. The same goes for errors related to outdated content, like vendor contact information.

Humans make mistakes, but it’s no secret that mistakes can impact the business, such as paying the wrong vendor or paying the same vendor twice, which may also impact valuable vendor relationships when trying to correct those errors.

AI solutions catered to helping finance teams can help employees in this crucial department avoid mistakes and detect them before they happen by reducing the need for paper and automating manual tasks by using one singular digital platform.

Furthermore, because all transaction data is stored in the platform, financial processes can be continuously monitored for accuracy. The solutions also provide built-in controls, like two-way and three-way matching processes, that can help prevent many payment errors by catching oversights and out-of-sync financial transactions.

  1. AI can analyze data and detect behavioral patterns for more confident market predictions, future spending forecasts and risk management

Looking ahead, almost half of CFOs surveyed in the CFO Indicator Report cite data management and analysis as key initiatives over the next three years. With a clear view of their data, they can wean valuable insights to help steer proactive, informed decisions and help their organizations respond quickly to change.

While organizations have no shortage of data at their disposal, it can be overwhelming to sift through if not properly managed, which could lead to significant financial risks and overlooked opportunities.

Cloud-based financial solutions store historical data automatically and provide easy access to it, creating increased visibility. This is especially valuable to organizations as they fight to manage cash flow and mitigate risks.

Solutions that leverage AI and ML can also analyze the data and wean valuable insights from it. The technology can help empower finance teams to make more confident market predictions, forecast future spending increases or decreases and detect fraudulent activity. These efforts help finance teams to manage risks, better budget and create more accurate financial projections.

Closing thoughts

As organizations strive to become more agile, AI-powered solutions can help them better prepare for what lies ahead from an operational and employee standpoint. According to a recent PwC study, 86 percent of companies who have accelerated their AI adoption since the COVID-19 crisis now see the technology as a mainstream to their business, and this is likely to continue as organizations navigate additional obstacles like inflation and a looming recession.

Through AI, finance departments can create better efficiencies to cut time and costs, collect valuable insights to guide decision making and make work more rewarding for employees to ultimately ensure a more resilient future.

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