The benefits of AI in finance — a practical guide for CFOs and Finance Directors

There’s a lot of hype about the benefits of AI in finance – and a fair degree of scepticism about some of the claims made for the technology.

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If you lead a finance team, you might want to hear a bit less talk of the promise of AI and a bit more about what it can actually deliver, here and now. That’s what this article will look at.

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What are the main benefits of AI in finance?

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In the few short years since ChatGPT brought AI to mainstream attention in 2022, the technology has had a big impact on many workplaces – and it’s set to transform many jobs even further.  

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In research carried out for iplicit by Sapio Research, 83% of finance decision makers in mid-market organisations said their workplaces had either fully or partly adopted AI tools.

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They cited benefits including:

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• speed and efficiency (named by 52%)

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• accuracy and error reduction (46%)

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• better workflow and coordination (37%)

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• improved decision making (35%)

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• cost reduction (33%)

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• increased capacity (32%) and

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• better compliance and risk management (30%).

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AI reduces manual reporting and can bring a new, real-time visibility to your finance operation.

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Faster reporting and month-end close

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Producing management information and board packs can be laborious work, involving a series of time-consuming manual processes.  In all too many organisations, the month-end close isn’t completed until the following month is more than half done.

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AI and automation can transform the efficiency of that everyday work and get that month-end close done much more quickly. In some cases, routine tasks that used to take days can be done in minutes.

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Thanks to AI’s ability to digest large amounts of data, sifting and retrieving information faster than a human could, those management accounts and board packs can be produced quickly and efficiently with real-time data.

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Real-time financial visibility

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Decision makers need timely financial information – but many finance teams struggle to deliver it. The protracted process of getting accurate data into the system is compounded by unwieldy methods for getting the information back out in a usable format.

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Besides improving efficiency, AI can fundamentally change the way you see your data. Cash flow, P&L and balance sheets can all be at your fingertips in real time, without you having to switch systems. AI can produce the reports and dashboards you need – but its role can go beyond presenting information in prescribed formats. A tool like iplicit Insights can retrieve and present the information and insights you need, at your request, in response to questions you ask it in ordinary, conversational language.

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Fewer manual data errors and better data accuracy

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Finance professionals are naturally vigilant about accuracy and compliance – so you’ll be keen to consider any risks that come with AI adoption. iplicit's research showed 94% of finance decision makers had some degree of concern about the use of AI in finance software, with 38% of respondents citing the accuracy of AI output as their top worry about the technology.

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However, AI tools that work with your verified and secure data are very different from those that draw on a vast quantity of publicly available information. The key is that a finance-specific AI tool works only with your figures – and that every report and insight it produces is directly traceable to your source data.

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More time for strategic work

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Professionals everywhere complain that they’re too bogged down in routine tasks to spend enough time on higher-value work. However much you try to be strategic and proactive, those everyday tasks will take over unless you can delegate them or automate them.

That’s where AI can be most helpful – as a tool that frees up finance professionals, rather than replacing them. It’s unlikely ever to supplant the creativity and judgement of an experienced finance professional. It certainly can’t manage your team and it can’t sign its name to be held legally responsible for the accuracy of the report and accounts. What AI can do is automate those repetitive and transactional tasks that take up disproportionate time, allowing everyone to do their most valuable work.

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Is AI in finance right for your team right now?

Almost every workplace could seek to improve its efficiency by wise use of AI tools in admin and organisational work. But when it comes to finance, there are some important issues to be considered first.

An AI tool will be drawing on your finance data. It’s important to ensure that data is complete, correct and current. If the quality of your existing data leaves something to be desired, or if your system is hampered by inefficiencies and duplication, you may need to address those issues. You can then confidently take your next steps towards reaping the full benefits of AI.

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FAQ

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What are the benefits of using AI in accounting?

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AI can dramatically improve efficiency in a finance team, getting core tasks done quicker and with less scope for error.

It can give you a new level of visibility over your data, producing reports and dashboards in real time and providing insights in response to your questions.

How can AI help a finance team?

By reducing the time taken up by routine tasks, AI can boost the efficiency of a finance team and free staff to focus on higher-value, strategic work.

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What are the risks of AI in finance?

The key risks that come with AI adoption concern data security and accuracy. It’s important that confidential data is kept private and that your AI tool only draws on your own verified data, not from public sources.  If your data is less than complete and accurate, it’s worth addressing that early on.

iplicit's own AI tool, iplicit Insights, draws on your verified finance data to provide insights and suggest actions while leaving you in control. Discover more – or if you have three minutes, take a quick tour of iplicit.‍