By Anant Kale
Every finance team should know how artificial intelligence (AI) can be used to identify and remove waste and fraud. Besides rationalizing expenses and finding errors in transactions, AI can help a business reinforce imperatives, increase employee retention, and jump ahead of the competition. Here are six predictions regarding AI trends that CFOs shouldn’t ignore in the new year.
The least sexy AI companies will win.
The market has AI fatigue. Nobody knows this better than the CFO who has had to shell out funds for AI projects that have had long timelines and elusive returns. In a tighter marketplace, CFOs (and their boards of directors) are developing more of an appetite for brass-tacks innovation projects that have quicker wins and short-term return on investment.
AI will let knowledge workers ditch mundane tasks.
Most AI news stories have focused on how the technology will automate factories and manual labor, but the fact is it will do the same for knowledge work. Companies don’t want to waste their most expensive talent on low-level duties. The fastest-growing AI companies are unshackling people from rote work across all business functions – whether it’s A/B testing in marketing, QA testing in development, or expense report approvals in finance.
Finance is ripe for AI disruption.
Data science and AI are the natural children of the larger internet revolution – the result of billions of user clicks and decisions over the preceding decades. We have already seen how all this data helps behemoths like Facebook and Amazon create algorithms to drive outcomes and profits. Until now, such data science and AI have not been strictly applied to companies’ finance teams. The technology has arrived to help CFOs look under the hoods of their own companies’ spending in unprecedented ways.
AI-based spend audits will be a fiduciary imperative.
The average company audits a fraction of its spending, yet waste and fraud can be costly. Despite finance teams’ diligence in prenegotiating vendor pricing, redlining contracts, and establishing thoughtful policies, CFOs struggle when it comes to follow-through, which is manual, time consuming, and error prone. CFOs who act with a fiduciary duty of care will need to lean on AI to suss out waste and fraud.
Companies won't comply with their spend policies unless they use AI.
Companies audit 2 percent to 10 percent of their expense reports, and less than one-third of all invoices. Using AI to audit spending is the only way to solve the contradiction of auditing all spending and still moving at an appropriate business speed.
Companies with AI-based spending audits will have happier employees.
AI-based spending audits eliminate manager approval and can cut employee expense reimbursement from nine days to one. Forget foosball in the breakroom! Same-day turnaround is what makes employees cheer!
Anant Kale is co-founder and CEO of AppZen, a company dedicated to bringing AI into back offices. Previously, he was vice president of applications at Fujitsu America.