It was all going fine. And then, as abruptly as one can imagine, organizations were asked to work remotely amidst a nationwide lockdown. While businesses came to a standstill, even the basic or so-called ‘hygiene’ operations were impacted. Rolling out salaries to employees had become a problem because of the lack of remote technological support to access systems or generate reports and give instructions to the bank.
However, several organizations had equipped themselves digitally to leverage the cloud and manage ad-hoc operational requirements. They have also extended it to areas where the advantages of an OPEX model of operations supersedes the CAPEX model.
Financial leaders of organizations that had adopted a Cloud-based ERP were able to seamlessly process salaries and make payments while the ones with on-premises ERP setups were struggling to do so remotely. Even better were financial leaders who leveraged new-age technologies such as Artificial Intelligence (AI) and Machine Learning (ML) to automate rule-based, redundant, and repetitive tasks. These technologies also enabled the finance teams to focus on core operational challenges and make quick decisions with respect to all aspects of the business including payables, receivables, taxes, etc.
Let us harp on a few key areas which can be vastly augmented by leveraging the power of AI and ML:
Management of payables and expenditure:
With Finance and Accounting being very tightly coupled, organizations have several processes which are completely manual. These processes are rule-based and repetitive hence a system can be trained to do exactly what needs to be done. It can initially be supervised by a human being but as the system matures, the human intervention can gradually come down. For example, An organization can completely automate its reimbursements and claims and several sub-processes within it can be completely AI-powered. Not only does it make the process paperless, but also automates it and makes it seamless. Automation solutions can also be built to seamlessly read invoices, check for key details such as GST number, etc., automatically approve invoices, and enter them into the list of payments that need to be processed. It can also send back the invoices that have details missing with reason for the same being listed.
Management of Receivables:
AI can read, learn, and understand data and patterns to raise early warning signals. It can equip the finance managers with information on delayed payments and the likelihood of default. Such information can enable better management of cash flows, liquidity scenarios, etc., and enable finance managers to plan better.
Organizations, especially those that come under the purview of a regulator, must send reports which could be periodic in nature or ad-hoc.
An AI-powered financial system can ensure the automation of reports that need to be sent out periodically. This will ensure that the report goes out to the internal or external entity on the said date and time as required. Finance departments can also leverage AI and ML technologies to ensure faster closing of books and better reporting of expenses, income, and profits.
AI systems can also raise alerts and triggers by spotting errors that, if unattended can lead to a financial and reputational loss for the organization.
Enhance Operational Efficiency and Profits
AI and ML enable organizations to understand areas where unwanted budget allocations are taking place. It can then optimize the costs. AI-powered financial systems can seamlessly interact with other applications, and gather intelligence on the operations across the organization, identify areas of ‘spend’ optimization, and enhance the bottom line.
The pandemic has accelerated the adoption of the cloud and many organizations have already modernized their financial systems by either migrating it to the cloud or by implementing a SaaS-based ERP and getting rid of their existing on-premises financial system.
For such organizations which have built a seamless cloud-based financial system, leveraging AI and ML can enable operational efficiency enhancement, rationalization and optimization of expenses, improved reporting to both internal management and external stakeholders, and most importantly, augmentation of profits.