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Like many other business departments, the finance function is the latest area to undergo a period of rapid technological growth due to the rise of automation and introduction of Artificial Intelligence (AI). As finance sits at the heart of almost all business operations the way in which CFO’s and FD’s respond to and understand AI will put them in the driving seat for embracing change and underpinning growth across the entire business.
Finance departments have been using automation for some time to save time and money, but the introduction of AI takes things to the next level by providing CFO’s and FD’s with an in-depth insight of the business position and identifies growth opportunities and risk areas using forecasting, financial planning and customer behaviour modelling.
The role of the modern CFO has changed drastically in recent years with a shift away from traditional financial management and a move towards understanding strategic risk and using future forecasting and planning practices to drive business growth. CFO’s have become one the key drivers for embracing change and strategic development on a business wide level with financial data underpinning almost all business operations.
The change comes as business leaders face the realisation that data is one of the most powerful assets a business can hold, and the growth of technology and AI has made scenario-based planning a reality using real-time data. Therefore, CFOs are better placed to deliver financial and non-financial information to all stakeholders.
Let’s delve into some key areas where AI is transforming the role of the CFO.
AI-driven predictive analytics enable CFOs to forecast revenue, cash flow, and market trends with greater accuracy, whilst tools can also simulate various economic or business scenarios, helping CFOs prepare for uncertainties and mitigate risks. AI helps to produce vast amounts of structured and unstructured data to provide a deeper insight and assist with making data-driven strategic decisions.
AI has become popular in the automation of invoice processing, payment tracking, and fraud detection. This reduces manual effort significantly, along with errors and fraud risks whilst saving money. AI is also being used with great success in many companies to streamline bank and ledger reconciliations to deliver real-time accuracy in financial reporting and regulatory compliance.
Using AI to analyse spending patterns and identify areas for improvement can help you allocate resources efficiently and can identify where inefficiencies lay, whilst providing recommendations for cost saving measures.
AI models assess credit, market, and operational risks more comprehensively than traditional methods meaning that potential business growth opportunities can be fully risk assessed before being carried out.
Real-time, visual financial dashboards provide up-to-date insight into the financial position of the business and Natural Language Processing (NLP) tools create automated financial reports and summaries for time saving.
The CFO role has changed dramatically in recent years with# technological advancements such as AI coming to the fore. AI has empowered CFOs to transition from operational managers to strategic visionaries, enabling them to create value and drive innovation across their organizations. Financial and non-financial information at the hands of CFOs is being analysed and used to drive business growth and drive strategic change on a business-wide level.
For more information about AI-powered business and finance software from Pegasus please contact us and arrange a bespoke tour of Opera 3 SE.
Posted On: November 21, 2024
