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A CFO’s Guide to AI in Finance and Accounting for 2024

25th Jan 2024
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Discover how CFOs can support their departments navigate the innovations and challenges brought by AI in finance. Enhance compliance and security with cloud accounting, accelerate financial processes with end-to-end automation, and elevate cash flow forecasting through machine learning algorithms. Keep on reading.

What is AI in finance and accounting and how are finance professionals leveraging Artificial Intelligence for day-to-day business operations?

So far, we know for sure that:

  • Generative AI is expected to bring in $2.6 trillion to $4.4 trillion annually to the global economy.
  • AI technology enables the automation of up to 70% of business processes.
  • The banking industry alone could see an additional $200 billion to $340 billion per year if fully implementing generative AI technology.

Although difficult to believe, this is just the beginning of the AI revolution in finance and accounting.

While AI certainly brings some of the most innovative changes in finance and accounting, the most important question CFOs must ask themselves is:

”How will AI actually affect our company and individuals working in finance?”

In this piece, we wanted to look at major areas for CFOs to explore when considering AI applications in finance:

  • Compliance and security
  • Fraud detection
  • Risk assessment and management
  • Cash flow forecasting

But first, …

What is AI in finance?

AI in finance refers to the use of technologies and algorithms such as Machine Learning for financial operations, including banking, trading, and accounting.

These past couple of years, many companies have fully embedded AI and machine learning within their operational model. The result is that it has become an accepted part of everyday life — so much so that many people aren’t aware of all the ways they are using it.

In finance, one clear example is interacting with helpdesk software for credit applications. While this represents only the tip of the iceberg, we predict that automation will be increasingly used for processing documents such as invoices, reporting, and going as far as managing expenses and budgets.

With that being said, what is AI in accounting and how it can help CFOs and finance professionals enhance complex processes and operations?

Where AI in accounting will come into its own is the ability to work out what to do with documents without being given rules by human managers.

AI in accounting and finance is particularly suited for identifying patterns. It marks the end of data analytics as we’ve come to know it, by processing huge volumes of data with unmatched accuracy and producing reports faster than ever.

Finance automation is likely to continue its march this year, meaning that finance professionals will definitely feel the effects of the increased use of AI and machine learning for routine tasks, including reporting and cash flow forecasting.

What are the advantages of using AI for finance professionals?

There’s no doubt that AI requires an investment in time and money for any business that is looking to develop and implement an operational solution.

Thankfully, AI brings many perks to finance professionals, justifying the resources needed for implementation and training. Some of these advantages are the following, in no particular order:

  • Increased long-term efficiency — more resources for finance professionals
  • Faster and more accurate reporting — become closer to real-time than ever before
  • Processing huge volumes of data — AI can draw conclusions from much larger data sets improving the quality of the output
  • Spotting trends — effective pattern identification producing insights that human analysts may miss
  • Better connectivity — linking a variety of data sets to enrich the depth and breadth

2024 will see a significant increase in the adoption of AI. New developments will appear rapidly with the potential to become disruptors. Large language models such as OpenAI’s GPT5, Meta’s Llama 3, Anthropic’s Claude 3, and Inflection AI’s Pi 2 are all slated to arrive in the next 12 months for example.

How to use AI in Finance and accounting?

In what specific instances may we see AI in our day-to-day lives? Below we explore six main areas where AI claims the spotlight, and how CFOs can use this to improve team dynamics and stay on top of the competition.

Compliance and Security

Audit, compliance, and security are three major areas that could certainly benefit from AI applications. AI technologies can streamline auditing to ensure the company is compliant with the latest laws and regulations as well as simplifying the entire process for finance individuals who can now concentrate on core activities.

Additionally, all businesses, regardless of the size, must choose to protect themselves with the latest systems to avoid becoming vulnerable to cybersecurity threats.

Cloud applications tend to be much more secure, with the software provider taking care of encryption and access control rather than the company. Old accountants will be able to tell many war stories about the old days when accounting software was last in line for IT security patches.

As cloud computing has evolved, one of the biggest winners has been the accounting sector and there are a series of very good reasons why cloud is so suitable for finance applications.

Fraud detection

It comes as no surprise that fraud detection is an area where AI is already making incredible progress. AI technologies enable us to spot patterns and analyse vast quantities of data rapidly and effortlessly.

But how does AI for fraud detection work?

For example, as Fraud.com points out users can “natural language processing (NLP) to analyse unstructured data sources such as emails, chat logs, and social media posts” to enrich the data already in company systems and keep an eye on any suspicious activity that could affect the finance department.

Risk assessment and management

Speaking of suspicious activities, AI can also assist greatly in risk management both in identifying and assessing risks as well as developing mitigation strategies.

For larger companies, it is always worth investing in software-based compliance systems that help colleagues to identify and control risk and when allied with an AI approach this can be incredibly powerful.

Cash flow forecasting

AI-powered systems can give users the option to conduct a deep dive into report lines down to the transactional level. True ‘on-demand’ information is the way to allow users to self-serve information to answer their queries and make predictions quickly and accurately.

Whilst we have concentrated on more transactional work, it is also the case that AI will make inroads into the higher-level tasks that finance manages such as forecasting and planning.

AI has the ability to learn how cash flow works in any particular organisation and can forecast balances and develop methods of improving cash flows.

Challenges of using AI in finance and accounting

The recent Bletchley Declaration on safe AI development and deployment shows that governments are now taking seriously the possibility of negative impacts from technology. This suggests that the growth in the use of AI won’t be entirely unfettered.

For instance, one mistake that many businesses make when looking at cybersecurity is thinking that it is a purely technological problem with a corresponding tech solution when in fact, so much of cybersecurity focuses on human interaction with systems.

At an operational level, new roles may need to be created, either for pure AI and tech experts or for people with one foot in the finance camp and one in the new realms of tech. Traditional finance skills will remain crucial as the finance team helps to lead the business into a positive future.

Additionally, as tech quickly changes companies, and finance departments in particular will need people to manage the implementation process and ensure that their investment is fully leveraged.

In short, as the developed world experiences shortages of personnel, there will be a concerted drive to bridge the gap by leveraging AI and upskilling current employees.

One solution for CFOs to drive financial success

Access Financials gives your company the power of cloud-based accounting software that frees up resources and enhances operations. Give your team the tools and functionality they need to keep up with the innovations and challenges brought upon by the latest finance trends, and discover the Access Workspace.

Speak to one of our specialists