Why finance functions must digitally transform in 2024

Integrating artificial intelligence is being recognised as a key strategy to future-proof finance teams.

AI has had its sceptics, but forward-thinking business leaders are recognising the undeniable benefits it can bring. Like a lot of new technologies, many have greeted AI with fear. Will it take their jobs? Will it be uncontrollable? Is it an indication of a future dystopia?

Fortunately, the reality is much more positive (and far less dramatic). AI is allowing businesses to take their operations to the next level and unlock a level of efficiency and productivity not previously possible. Instead of there being a divide between sceptics and believers, there is now a gap emerging between non-adopters and the adopters already transforming their businesses for the better.

How AI is improving AP

AI’s transformative impact is most evident in a business’s finance department. At its simplest, AI can instantly and accurately execute mundane tasks, automating manual processes and freeing up employees for other, more valuable tasks. This will be music to the ears of anyone working in AP, a function fraught with onerous and time-consuming tasks.

AI is enhancing many parts of AP, such as:

• Data analytics
• Fraud detection
• Invoice collection
• Expense management
• Payment monitoring

AI uses machine learning to process and analyse large volumes of data. This means patterns are identified and insights extracted much more quickly than if done manually, allowing those working in AP to benefit from exceptional data analytics. AI can do this via the four main data analytic disciplines: descriptive, diagnostic, predictive and prescriptive. This represents the ‘what’, the ‘why’, the ‘what next’ and ‘what should we do’, respectively. 

For businesses with very active AP functions, this means greater insight can be gleaned from invoice and payment history, helping teams plan and prepare for potential surges in activity, as well as respond to highlighted discrepancies. The prescriptive discipline of data analytics is perhaps the most powerful application of AI, giving finance directors actionable suggestions and solutions.

Trawling through all this data, in a far faster and cleaner way than a human could ever do, is also crucial for fraud detection. Trying to manually identify potentially fraudulent activity in a ledger that may have thousands of lines of data is akin to looking for a needle in a haystack. However, AI can be programmed to identify suspicious behaviour and flag anything that breaches predetermined parameters. This adds a powerful layer to a firm’s security processes.

Processing invoices has traditionally been done manually. AI allows this task to be fully automated, ensuring invoices are securely processed in a fraction of the time. The results are undeniable. In a Quadient survey of over 300 AP teams, AI tech had reduced the time spent on data entry by 83%. Simultaneously, data accuracy increased by a staggering 99%. This automation allowed invoices to be processed up to nine times faster, ultimately reducing the processing cost per invoice by £12. 

AI is also transforming expense management. This has traditionally been held back by manual processes, prone to fraud and potentially costly inefficiencies. Automation of expense management means this can all be streamlined, with accelerated reconciliation processes that are fully integrated with other accounting programs. Reports on expense behaviour trends can also be quickly and cleanly produced. 

Such automation can also be extended to payment monitoring. AI can analyse and automatically match invoices with corresponding payments, giving real-time visibility into payment processing. This can help avoid late or duplicate payments, improve vendor relationships and increase the accuracy around this function. 

No stopping now

The breakthrough in AI has already happened. It’s not a question of if firms adopt it, but when. In 2023, a survey of 1000 SMEs found that 59% were already using AI in some way with 23% planning to do so in the near future. These figures will only grow. 

The benefits of AI are clear and finance departments are already being transformed. It is allowing businesses of all sizes to automate more of their processes and generate efficiencies that could not previously be imagined.  

Before long, the first-mover advantage of industry leaders will be all too apparent to those that have been hesitant to innovate. As with many areas of technology that were once astonishing but have since become standardised – from PCs to smartphones – AI will assume a central role and leave laggards struggling to catch up.

Fortunately, there is still time to engage with AI. If you’re ready to learn how you can put it to work in your accounts payable process, schedule a demo today.