Using technology to withstand Covid-19
Artificial intelligence (AI) is poised to transform the finance industry with advancements that eliminate tedious tasks and free up time for financial teams to prioritize higher impact responsibilities. Yet most businesses (80%) still haven’t employed AI in their workforces due to uncertainties around the business case or return on investment.
This lack of understanding is a growing issue for financial teams dealing with massive amounts of data, particularly amongst smaller businesses. In the digital transformation era, more and more clients are digitising processes, increasing the number of spreadsheets and documents that accounting and audit professionals must analyse.
As businesses adjust to the current economic situation, the need to streamline processes for a financial team that may have been reduced in size becomes even more vital. In addition, businesses need to draw even deeper insights from their spend data to make decisions that will help them succeed in a challenging situation.
For too long, SMBs have believed that the use of data and technology is out of their reach, but now is time to overcome this. Here are three ways AI can help control costs, reduce fraud, and increase efficiency.
Streamlining data entry and analysis
AI and machine learning can really help financial leaders stay on top of transactions amid systems that are tedious and time-consuming. Instead of financial data spread out over multiple types of documents, such as PDFs and spreadsheets, machine learning – a branch of artificial intelligence – extracts data from receipt images, automatically classifies it based on spend category and populates reports for analysis in one place.
These comprehensive reports can provide businesses with smart insights to improve financial planning. Machine learning also draws deeper insights as it processes data over time, meaning businesses can gain a comprehensive view into long-term spending patterns and finance teams can deliver even greater value to organisations by advising clients on optimal budget forecasting.
This also has a benefit for employee experience. The modern employee is used to using technologies such as these in their personal life and wants the same seamless experience at work.
Automation and machine-learning can empower employees to take better control of things like expenses, as there will be less manual work for them to complete. This leads to increased productivity for the workforce, something that every SMB would welcome with open arms right now.
Company spending has become increasingly decentralised. Today, employees spend more money across additional spending categories, using more payment methods than ever before.
As financial data volume grows and spreads across additional payment channels, the risk of fraud and non-compliance increases. This is a risk few businesses can take, especially when cash flow needs to be conserved.
According to the Association of Certified Fraud Examiners, the average organisation loses 5% of its annual revenue to internal fraud – and the most common types of fraud are accidental, like mistakenly entering an expense or invoice twice, and asset misappropriation such as padded expense claims. Organisations and auditors can typically only audit 10% of expense reports manually, leaving most of the potential fraud to go undetected.
AI, on the other hand, can audit up to 100% of spend reports. By predicting patterns and detecting a wide range of anomalies in financial data, AI can help auditors catch fraudulent spending before reimbursement occurs. Because it’s scalable, AI also can easily handle influxes of financial data with the same level of accuracy. In fact, analysing more data makes it smarter and better at tackling financial fraud.
Covid-19 has made it more important than ever that businesses are identifying any fraudulent activity and preventing it. Unfortunately, there are nefarious actors submitting fake invoice requests to organisations all over the United Kingdom in the hope that they won’t be checked.
This can be an even bigger problem for small businesses, with smaller finance teams that are increasingly stretched. Technology can ensure these scam invoices are always caught and can save organisations money in the long run.
Enforcing corporate policy
AI and other technologies can be used to drastically reduce the time it takes to identify noncompliance issues in finance data. Purchase orders, employee receipts, travel bookings, and credit card transactions are automatically scanned for purchases made outside of policy – enabling auditors to quickly right the error and help enforce corporate policies with employees.
For example, AI can automatically detect employee expense violations such as disallowed or personal spend, unverifiable receipts, personal credit card usage, disallowed merchants, and unapproved travel add-ons.
With increased visibility into corporate spending patterns, organisations also can determine which policies are working for the company, as well as whether certain policy violations are justifiable. For example, using a car-sharing service instead of a rental car could save the company money, suggesting an opportunity for updated allowances that better align with employee habits.
Using an AI application to gather and summarise numbers helps finance managers identify trends to make data-driven recommendations for their client’s corporate policies.
Finance professionals are long overdue for a technology assistant. By leveraging AI-powered solutions, they can streamline data analyses, reduce fraud, and focus on more strategic functions to help ensure their business withstands an economic downturn.