As mid-market companies keep a close eye on emerging economic factors that could derail them, they are increasingly concerned with protecting their cash flow and finding ways to future-proof their business. Joseph Fox, Chief Product Officer, AvidXchange, discusses how investing in AI solutions for finance can help increase efficiencies, close skill gaps, and create new insights into invaluable data to empower the entire organization.
Mid-sized companies are overtaking corporations in adopting artificial intelligence (AI). Deloitte’s latest state of AI in the enterprise Opinion poll. The report shows that 80% of midsize companies intend to increase their annual AI investments, a jump from 25% in 2018.
This is no surprise as the benefits of AI can help almost every area of midsize business. For example, the technology can offer stronger supply chain management, more targeted marketing, and tighter security. Finance is another core business area not to be overlooked when adopting AI, as finance leaders can benefit from AI modernization and may never have needed it more.
In the midst of today’s economic upheaval – inflation, a possible recession and shortages in everything from microchips to staffing – the finance team is tasked with looking after the bottom line of their organization. The future of the company often depends on the success of the team. AI-driven solutions can help the business stay afloat, more easily adapt to change, and be better positioned to leverage competitive advantages to ensure a more profitable future.
As midsize companies consider their overall information technology (IT) budget, here are three powerful ways that AI investments can empower finance and lead to a healthier, more lucrative future for the business.
- AI-driven automation creates efficiency and ensures accuracy
As reported in The Harvard Business Review52% of the medium-sized companies surveyed The National Center for the Middle Market (NCMM) rated digital as either important or extremely important, and 46% already have a digital transformation roadmap built into their strategy. AI is an important component of these digital transformation initiatives as it can power tools that promise efficiencies and provide competitive advantages like automation.
The finance department, in particular, is ripe for an efficiency boost fraught with time-consuming tasks like reviewing documents, reconciling invoices, and processing payments. Many of the tasks can be automated with AI, freeing staff to do other work while reducing the chance of errors that could result in additional lost time and money.
AI can be trained to analyze financial data and help finance teams assess a company’s current financial health and forecast for the future. It also highlights problem areas and can identify patterns, such as: For example, a client who is routinely late on payments, allowing teams to make quick changes, e.g. B. Offering a more convenient payment method to improve results. Some automated financial management solutions are cloud-based, providing any approved user with real-time access to financial data on demand. The solutions improve data security and can save data owners the hassle of regularly responding to queries from internal stakeholders who rely on financial data for budgeting and forecasting.
AI solutions can also save time for external users by using chatbots and virtual assistants that provide 24/7 access and enhanced experiences for customers and partners.
- AI solves labor shortages and empowers finance teams to do more with less
Labor shortages continue to plague companies as executives struggle to fill a valued position 11.3 million Vacancies driven by a shift to remote work and The Great Resignation. Medium-sized companies are not immune to the labor market challenge. Joint data of the insurance company Chubb and the National Center for the Middle Market (NCMM) found that 51% of midsize companies find it extremely or very difficult to find and hire people with the right skills for the jobs available and feel that the strain is impeding growth.
AI can help by identifying patterns of who is leaving, why they are leaving and where they are going, and it can also help identify replacements.
Often those working with the day-to-day, antiquated processes inherent in finance departments are the most prone to blip. Corresponding Pew Research, feeling stuck in a job with no opportunity for advancement, is one of the top reasons for an employee to quit. Feeling overworked is also a motivator for change.
By integrating AI into existing processes and workflows, midmarket finance leaders can reduce workload and make work more attractive for employees. Automation also offers greater flexibility, enabling remote work environments and uncovering growth opportunities, helping to retain talent and attract new hires. And automating tasks allows companies to increase financial roles, free employees from growing workloads and repetitive tasks like data entry, and free them to focus on the more strategic aspects of their jobs. Instead of managing vendor databases or cutting checks by hand, finance teams can spend their time analyzing historical data to help their organization more accurately predict the future.
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- AI improves visibility and guides important decisions
The wealth of data that finance departments have can be overwhelming if midsize companies don’t know how to extract it or harness its value. Machine learning (ML), a component of AI innovation, collects data and can provide teams with valuable insights into their business. That Deloitte State of AI survey notes that given the current dynamic environment, medium-sized and small companies are increasingly using AI and ML for digital transformation.
AI and ML technology learns and works by analyzing and recognizing behavioral patterns, e.g. B. how and when vendors interact with their invoices, and it predicts the likelihood that these behaviors will continue. By analyzing historical data and spotting habits and trends, AI and ML can also help businesses generate market forecasts, predict future spending increases or decreases, and identify the statistical likelihood of billing anomalies or fraudulent audits. This helps manage risk and create more accurate financial forecasts.
The visibility provided by AI empowers finance teams to make proactive, informed decisions and respond quickly to change, fueling agility amidst uncertainty.
Empowering finance with AI investments
As greater economic forces and uncertain market conditions unfold, midsize business IT teams are faced with the challenge of deciding how and where to spend valuable budgets. When evaluating organizational needs, leaders should consider investing in AI solutions for the finance department to increase productivity, support employee retention, and provide better insight into cash flows.
These efforts can enable the department to make a notable difference across the organization, improving bottom lines and building resilience. Ultimately, modernizing with AI can mean the difference between weathering economic uncertainty or emerging stronger than ever.
In your opinion, how can the use of AI in the finance department help medium-sized companies? Let us know Facebook, Twitterand LinkedIn.
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