Percipient Operations Director Dan Clibbens examines how AI is driving genuine change in the office of the CFO and to what extent it’s expediting digital transformation.
According to Gartner, AI is already part of the fabric of the finance function, with 58% using the technology in 2024, rising from just 37% in 2023. Indeed, intelligent reporting has become a prerequisite for financial management in recent years, and AI has much potential to elevate this. But, before getting consumed by the hype, CFOs need to ensure that the right digital foundations are in place to optimise the application of AI technologies. With recent reports suggesting that AI forecasts are somewhat overzealous, how can CFOs separate the hype from the value and define the right priorities as we look ahead to 2025?
The Evolution of AI in Finance
It’s no secret that the finance function has evolved beyond retrospective number crunching, now playing a critical intelligence-led strategic role at the heart of an organisation. Adopting new technologies has been instrumental in this transformation, with AI capabilities making a real difference. Whether it’s automating manual, time-consuming processes or furnishing the business with deeper, data-driven insights to boost strategic decision-making, the potential is vast.
AI can replace manually intensive tasks such as AP Automation and data reconciliation, saving time and helping to eliminate the inevitable inaccuracies arising from human error. When it comes to data analysis, people can’t match the speed and precision that AI algorithms can achieve.
Forward-Thinking Finance
AI-driven predictive analytics can help accurately forecast revenue and cash flow challenges. Perhaps even more importantly, the tools are available to help CFOs predict what will happen in the wider market, allowing them to prepare for many eventualities.
This ability to forecast and predict with increasing accuracy has seen the role of the CFO transform, often placing the finance function at the very centre of the decision-making process. Access to real-time data and insight has meant that the CFO no longer reports on what’s happened and why. Instead, they’re now asked to accurately predict what will happen next and develop strategies on how the business should respond.
Overcoming the Hype
There’s no question about the transformational potential of AI, but CFOs need to be cautious not to get swept along with AI for AI’s sake. For AI to influence decision-making, CFOs and the wider finance team must ask the right questions about the technology and apply the output effectively. What’s key is the ability to translate AI-driven insights into an actionable, practical and effective business strategy.
Also, a great deal depends on the quality of the data. Before integrating AI-enabled technologies into the finance function, CFOs need to ensure that the business has a solid digital foundation in place, one that facilitates the smooth flow of accurate, accessible, and comprehensive data from right across the business.
Any CFO keen to increase the use of AI in the finance function must prioritise data quality. Access to high-quality, accurate data is vital if AI capabilities are to deliver maximum value. Therefore, it should be a crucial consideration to invest in suitable systems and processes to underpin data integrity and accessibility.
AI Priorities for 2025
As CFOs think ahead to 2025, AI should be on the priority list, but with a caveat. Depending on your digital maturity, there are several initiatives to pave the way for further AI-enabled changes to the finance function.
Any CFO keen to increase the use of AI in the finance function must prioritise data quality. Access to high-quality, accurate data is vital if AI capabilities are to deliver maximum value. Therefore, it should be a crucial consideration to invest in suitable systems and processes to underpin data integrity and accessibility.
A phased approach is often the key to successfully implementing AI technologies. For example, start with smaller, lower-risk projects or decisions before moving on to larger, more complex issues and challenges. This incremental approach can help build confidence and AI expertise across the finance team and the wider organisation, highlighting what can be achieved with AI and how this can be applied to all aspects of strategic decision-making throughout the business.
To a certain extent, the actionable insights that AI-enabled solutions provide are only as effective as the team or teams who’ll be applying the insights to everyday operations. As AI becomes more embedded within the finance function, the skillsets of the CFO and finance teams need to evolve accordingly. For 2025, training and upskilling must be a priority for the finance team to ensure that they can effectively leverage the capabilities of AI technologies if they’re to have the desired transformative effect.
Undoubtedly, AI has the potential to revolutionise finance, helping to make it more efficient, insightful, and proactive. However, to enable AI to fulfil its potential, CFOs must strike the right balance of ambition and practicality. By embedding robust digital foundations and investing in skills and training now, taking a considered, strategic approach to AI adoption, CFOs can gradually harness AI’s power to transform the finance function and the wider business.
Award-Winning Sage Intacct Partner
If you’d like more information on how Sage Intacct plans to boost productivity further with the new AI-powered Sage Copilot assistant, contact Percipient or call the team on 01606 871332.
