By Joe Fox.
With a possible recession looming, some organizations may feel pressured to slow down their technology spending when, in fact, accelerating the adoption of artificial intelligence (AI) may help strengthen their finance teams as they go. most need.
Finance teams are grossly understaffed and overworked, facing a persistent labor shortage and a volatile economy. They are often under intense pressure to manage their cash flow, guard against growing security threats, and keep a close eye on a future no one can predict.
AI-powered automation promises relief while elevating the role of the finance department and enabling them to better serve their organization during difficult times.
Consider, for example, the benefits of automating labor-intensive accounts payable (AP) processes that companies rely on to run their business.
AI can help ease the burden on accounts payable departments by automating manual tasks, such as those related to invoice processing and payments, saving a lot of time and money, while providing a Greater visibility into important financial and customer data.
Machine learning, a component of AI, can capture trends so your solutions can analyze relevant data to help make decisions and equip teams with valuable insights to automate targeted decision-making. This can provide efficiency with highly repetitive activities and ensure agility in the midst of exceptions and uncertainty. This is critical as research published by S&P Global Market Intelligence reveals that the ability to use data to make strategic decisions is becoming not only a competitive differentiator for businesses, but also a fundamental requirement and strategic imperative for success. Efficiency comes from the right strategy.
Here’s a look at what AI investments can do for finance teams and their organizations to help them weather tough times and future-proof their businesses:
Anticipate risks and guide decisions to strengthen the business and results
Data management and analytics is a top priority for 49% of CFOs surveyed in a CFO metrics report. The focus on data helps increase agility so organizations can make informed decisions and respond quickly to change as macro factors take hold.
Financial departments have a wealth of information at their fingertips, such as payment, invoice, customer and cash flow information. Those leveraging innovative technologies, such as cloud-based AP solutions, can access this data in real time from anywhere, which is especially useful in today’s hybrid work environments.
However, the massive amount of data available can be overwhelming if teams don’t know what to do with it, which is where AI and machine learning come into play. machine learning, finance teams are able to uncover valuable insights from their data. These tools allow them, for example, to analyze and detect patterns of supplier payment and invoice behavior, such as how suppliers issue invoices and how they prefer to be paid, and to predict the likelihood that these behaviors continue.
Based on this information, financial services can then make necessary fixes based on the provider’s unique circumstances, such as offering a more convenient and faster payment option, such as an electronic payment method. Making these adjustments can help make the organization’s bottom line more secure, while maintaining and strengthening a valuable relationship to secure future business.
By analyzing historical data and spotting patterns and trends, AI and machine learning can also help companies make market forecasts, predict future increases or decreases in spending. These tools can also detect the statistical likelihood of billing discrepancies and fraudulent checks, which helps manage risk and create more accurate financial forecasts.
Strengthen data security in the face of rising threats
Finance teams are also tasked with protecting their valuable data from fraudsters looking to take advantage of business vulnerabilities. A survey by the Association for Finance Professionals found that 71% of organizations were victims of payment fraud attacks or attempts last year, with AP departments being the most susceptible and paper checks being the method of payment most affected.
Automated technologies powered by AI can help better mitigate fraudulent activities such as business email compromise (BEC) and check fraud that can have significant financial and reputational impacts. Fraudulent transactions can be more easily identified with automated fraud monitoring tools and controls that alert humans to potential risks, providing better visibility into processes and transactions.
Automated AP solutions also offer more secure alternatives to paper checks, including encrypted and verified electronic payment options like Automated Clearing House (ACH) and virtual cards. These payment methods are safer and faster, providing businesses with quick access to funds, which helps them better manage their cash flow and, therefore, increase their resilience. Electronic payments also provide richer payment data, such as remittance information, providing better visibility and monitoring for increased protection.
Accelerate AI adoption to better prepare for the future
Economic uncertainty is back and will always come in cycles, but it offers an opportunity for finance teams to transform themselves into more agile and strategic business partners within their organizations.
Harnessing the power of AI and machine learning within PA will allow them to create efficiencies, free up their employees for more strategic work, and make proactive business decisions to help drive net results and success.
Joe Fox is a product manager at AvidXchange, Inc.