Written by: Mint Group CFO, Yvonne Dias

The tech-savvy CFO relies on data-driven insights to drive business intelligence and growth. As such, CFO’s have progressed from serving as a financial guide to the board to a strategic  advisor, providing guidance on new revenue streams and models, driving strategic initiatives and serving as the ultimate driving force behind growth. It all comes down to a little something I like to call ‘finance AI’. 

What is finance AI? 

Crucial to the transformation of the CFO, from traditional to tech-savvy, is the support of AI-infused technology to ensure transparent reporting, a seamless blend of financial and non-financial items, and the automation of processes to foster more innovation and deliver enhanced predictive business insights.  

A CFO reports on the most important business data points, comprising a deep understanding of the “what” of the data as well as the workings of inter-departmental and external business processes. With the help of finance AI, this understanding extends to the “what” and the “why” of data, resulting in improved decision making. 

With finance AI removing route tasks and providing initial trends, it arms CFO’s with the time to place more focus on information points and trends, applying these to the business strategy. As such, finance AI leads to impactful business decisions, models, and revenue streams while establishing a competitive advantage. Finance AI switches the focus from inside the business only to outside the company, enabling CFO’s to have a holistic view of markets, threats, opportunities and make decisions accordingly.  

How is finance AI empowering CFO’s? 

Finance AI is assisting CFO’s and finance teams in the following areas: 

Customer Information 

Having access to leads, opportunities, sales cycles, payments cycles and pricing of customers, places a CFO in a strong position to create trends and build client predictive spending patterns and models on products. Add pricing, size of contracts, team information and survey results, and you can work out levers of how to improve profitability and client value creation. 

Bad debts 

AI can assist with forecast and build models of client payment cycles. It can also determine if clients will pay their outstanding values, and aid credit departments to determine if credit should or should not be extended. With the right metric in place, AI can drive bad debts down and reduce the risk of credit taking on potential defaulters. 

Fraud 

From expense fraud to payment fraud, barring the financial loss and cash flow impact, it can be time-consuming to deal with these issues; from identification to resolving the issue to new procedures to deal with future cases. With AI, spending patterns can be analysed, and outliers identified which can detect fraud, duplicate claims, or potential double payments. This could save any business millions every year. 

Cash flow 

Critical to any business is cash flow and predicting patterns of paying and spending. Even if a company is in a healthy cash position, understanding investment cycles are critical. AI simplifies the building of more accurate cash flows and forecasts based on past spending and payment cycles. 

AI is aiding finance with the automation of routines and repetitive tasks. With automation, finance processes are quicker, with fewer errors and finance teams are applying AI to do massive labour intensive jobs. AI is assisting by taking over the transactional portion of the role to free up the CFO to focus on the strategic elements, maximising the organisational data and analytics values.

Overall, the challenges that finance AI addresses for a CFO comprises:

Demand for decision-ready data 

Currently, businesses either have fragmented data sets or face long processing times and manual work before data usage, which causes delays in reporting and decision making. Businesses are demanding quicker access to decision-ready data, and automation helps balance the need for accuracy and precision from a CFO perspective with quicker turnaround times.

Value delivery 

The CFO role is evolving to value-added services and not transactional processing as AI can now handle the transactional components. Finance is evolving from backwards-looking approaches and reporting to forward-looking predictive analysis and decision making. It is about adding value at a strategic level, driving growth and aiding with establishing a competitive advantage.  

Reporting on demand 

Reporting needs are also evolving, and access to real-time data and reporting is more critical than ever. Users want their views and metrics in easy to access, instant views. The aim is to provide insights into reports. AI ensures that the base work is automated, and trends highlighted. 

Unlocking growth and ensuring cost advantages 

With the automation of manual and transactional work, the CFO can focus on finding competitive advantages and building key relationships with suppliers to ensure cost advantages while creating new opportunities.  

There is a massive amount of technology that is currently available for CFO’s to use with many opportunities available, stressing the need for mapped strategies that highlight where you want to go with finance AI.  

Organisations should plan their AI roadmaps with operational staff, defined processes, agreed-upon measures and metrics and adequate governance. Setting up the correct data structure is also core to ensure the chosen system can pull accurate data and work correctly. AI is also reliant on history and past data for trends, so if data is not correct, this could lead to severe issues and skewed decision making. 

Where do I start with finance AI? 

To start an AI journey a business needs to map out the desired achievements, sanitise data sources and, preferably, start with upgrading current systems, such as ERP software, to ensure it is accessible to reporting tools. Part of this journey comprises training finance staff to be tech-savvy; as your digital journey matures, so should the skills of your finance staff.   

Embracing technology is the future of finance, and the scope will differ according to company size. Finance is now the strategic hearof the business, and this is driven through the tech-savvy CFO and, ever increasingly, supported by finance AI.