The digital transformation in all sectors across all departments has been evident over the last few years, especially following the COVID-19 pandemic.
The finance function has seen major benefits in its operations thanks to artificial intelligence.
Financial planning and analysis (FP&A) professionals can rely less on clunky, manual labor and more on strategic thinking and CFOs are becoming more confident in data accuracy and have shifted their focus to strategy.
According to financial performance management platform Planful, the best part about the whole thing is that AI does not have to replace the current workforce.
Automation helps to take on the more redundant, manual tasks that eat up the team’s time, making way for more creative thinking about new solutions for the organisation's goals.
There are three ways AI works with FP&A teams to improve the financial planning process:
1. AI improves forecast accuracy
At any given moment, the finance team is sorting through mountains of data to build accurate forecasts and scenarios for different possible outcomes.
Without AI, CFOs either need to hire additional staff to process data or make do with a lean team to get necessary tasks done at all costs. Traditionally, this is how teams have operated. Still, it takes up a great deal of time and resources and can lead to burnout among team members.
AI also continuously learns and adapts to new data, even if the data grows quickly, meaning finance leaders never have to worry about new information derailing the planning cycle.
2. AI makes FP&A teams more agile
Business executives expect their FP&A teams to create a variety of scenarios, budgets, and projections daily or weekly in light of rapid economic changes.
Creating a high volume of accurate scenarios aims to make the organisation more agile in dealing with market fluctuations. A manual strategy to tackle agile planning can make the team less agile in the long run.
Cloud-based financial management platforms (FPM) leverage AI to generate scenarios much faster than manual processes. This means that CFOs can look ahead, modify operations as needed, and respond quickly to fluctuating market conditions. All of which contribute to a more agile team.
3. AI lets the team focus on high-level activities
Finance and accounting professionals are meant to spend their time on high-value and creative work to grow the business. Instead, many of these workers are stuck in manual and repetitive workflows.
AI automates those repetitive tasks so the team can focus on more rewarding work, like using creative problem-solving to improve the financial IQ of colleagues across the organisation.
While not seemingly related to crunching numbers, these kinds of tasks are rooted in soft skills. They can dramatically improve the workplace culture and productivity. Cross-functional collaboration also leads to stronger relationships and improved communication.
