A survey constructed by Vena in 2021 concluded that out of 175 finance professionals, only 7% were utilising artificial intelligence (AI) in their FP&A processes. Another survey was conducted last year in 2023, and they determined that a full 74% of them still hadn’t implemented tech or AI tools into their teams.
The concurrence of this event continues to indicate how finance teams are behind in joining the AI train. Does this suggest their doubts about AI, or is there a lack of information on the benefits of leveraging AI?
AI is not an alien term; it’s not even an alien method for business functions. Marketing, human resources (HR), and even sales have begun to employ AI in the way they do things. Students opt to use Gemini or Chatgpt to help them with academic writing. Considering the growing popularity across different business functions, AI has proven to be an excellent tool. And the truth is finance teams need to catch up.
Finance teams could benefit so much from AI – especially more recent advancements in generative AI. Their unique positions are not only the keepers of their organisation’s most critical data but also their role in ensuring every data that comes in doesn’t go down the drain and making data-driven decisions on a daily basis rather than waiting until the end of the month. These efforts help to move their business forward.
AI accelerates the transformation of raw data into valuable insights, allowing finance teams to dedicate more time to driving strategic initiatives rather than getting bogged down in data entry and manipulation.
Finance teams are wise to approach AI cautiously. However, with the right human guidance, AI has the potential to greatly enhance the capabilities of FP&A teams. This article will explore the 4 main functions that enable next-level finance teams to trust AI’s game-changing potential. All of them have revolutionary potential, but there are potential risks to be mindful of.
Regularly Updated Insights For Stakeholders
FP&A teams are the backbone of an organisation’s data. Every piece of data that comes in is considered a treasure hunt and must be kept in a treasure chest. In their efforts to serve the rest of the business, their day-to-day tasks involve constantly answering questions, filling requests for financial data, and tracking down critical details—which can be time-consuming and distract them from collecting data quickly and efficiently.
So, if a stakeholder demands an answer at the end of the day, there’s a chance FP&A teams will need to put aside their daily tasks, leading to delayed work.
AI revolutionises the way stakeholders access insights, eliminating the need for intermediaries and allowing us to tap into self-service analytics. With natural language processing capability, stakeholders can now ask AI questions using everyday language. FP&A teams can now focus on high-level strategic initiatives, thanks to AI handling the heavy lifting.
Generate Financial Models
What causes mundanity on a Monday morning? The repetitive work. This usually happened with FP&A teams, whereby they had to deal with generating financial models by creating multiple scenarios manually through Excel. The time taken to produce one scenario was already time-consuming, imagine with hundreds of them. Although it is typically a meticulous and time-consuming task, AI removes the burden by providing you with less time to generate multiple models.
The approach that has worked in the past might not be the best fit today. As every business strives to be one step ahead, you can’t risk dealing with tedious manual processes.
AI needs to be seen as a collaborator rather than a competitor. Its objective is to save time for finance teams so they can always work with the most updated and current data. To facilitate excellent and more agile decision-making and planning, finance teams must learn to coexist with AI.
Forecasting The Future Like A Weather Forecast
Don’t you feel like a finance wizard when you can predict the future trend? AI may not be all that, but it has proven its power for finance teams as time changes. With the right tool, AI can be powerful in helping FP&A teams to forecast the future.
Without needing to heavily rely on historical data and manual calculations to forecast future sales, cash flow and the like, AI-drive solutions like Workday Adaptive Planning are built with predictive analytics and machine learning (ML) tools so every forecast is made possible by leveraging real-time data from across the organisation. This means teams can keep on top of the most recent risks to their business and make up-to-the-moment predictions.
Of course, data needs to be regularly checked manually by humans rather than 100% relying on AI to avoid any inherent bias in your AI algorithm and tarnishing the result.
Identify Anomalies In Your Data In A Split Second
We may not underestimate the skill of finance teams. They can detect any errors in the long list of financial statements. However, AI is trained to spot anomalies in a matter of seconds. Any changes and errors found in the data will be flagged by AI, which would be a big help during the peak season for finance teams, whether it’s noticing a mistake in the data or pointing to a trend that’s just beginning to emerge.
We all make mistakes, especially when racing against the clock or dealing with massive data. In these situations, it’s easy to miss early signs of something important, like a new market trend or a potential threat to our business.
The Path To An Enhanced FP&A Processes
AI is truly a game-changer for teams that fully embrace it. It’s propelling finance leaders further down a path they’ve been navigating for years – a path towards becoming strategic business partners who do more than just create financial statements and reports. They are now driving the analysis and insights that fuel business growth.
Discover how the latest AI tools can supercharge your journey, making it quicker and easier than ever before. Finance teams, it’s time to step into the future, seize the opportunities AI offers, and master the art of risk management.
