How Automation and AI are modifying the financial close

How Automation and AI are modifying the financial close

One thing today is sure – businesses are no longer being run and operated in the same way as before.

Remember the days of:

  • Rummaging through cabinets for hours to find specific files
  • Dictating memos and other assignments to your secretary
  • Keeping your computer at the office only to return to it the next day

You probably do, but younger people don’t, especially those who are yet to start working. They only know the world of today where professionals use cutting-edge technologies that help them automate tasks and thus save time and improve efficiency.

Despite the new technologies, some challenges the employees used to have are still here today. For example, many finance and accounting departments still rely on old standards and processes. In turn, many of these often result in:

  • Lower employee performance
  • Costly errors that can end up costing the business millions

Now both of these results are easily preventable, and they only happen when the departments are using old-fashioned methods.

There is a light at the end of the tunnel though, and it comes in the shape of new and emerging technologies. They give the promise of highly sought solutions to these persistent challenges.

In this article, we are going to focus on the most important ones of these emerging technologies and how they are changing the operations within the finance and accounting departments of many companies.

We at Consero believe that the most important ones of these technologies are automation and artificial intelligence (AI), which is why we are going to discuss precisely these.

Automation

Decades have passed, and many accountants have already grown accustomed to the necessity of spending hours to make sure that the books close. For that very reason, many of the big picture tasks remain unfinished as there’s no time for them. Some of these tasks include:

  • Revamping outdated processes
  • Conducting fluctuation analysis

The financial close often causes chaos for the department, and these essential tasks remain unfinished. Some 82% of professionals can attest to that. They all say that the end-of-the-month close is a negative experience.

The solution lies within automation. Many of the tedious tasks involved here can be easily automated, and the business will end up benefiting in several ways, like:

  • Higher accuracy
  • Time saved
  • Less employee stress

For example, the task of ticking and tying is one that many accountants hate, but it has to be done, and they are the ones who have to do it. But by using adequate software, many manual operations are eliminated because the tie-outs from reconciliations to trial balance are automated.

When it comes to errors, as you can already confirm, they tend to happen at the worst possible moments. You can also attest to the fact that they are a necessary aspect of the job. The problem then is to identify and correct them as soon as possible. That will:

  • Mitigate their impact on the company
  • Convince the employees that the company won’t go under when they make mistakes

The best way to ensure the errors are caught before they become a real problem is to leverage the automation that’s readily available in cloud ERP applications.

Creating a certain standard for the financial close at the end of the month and improving the communication can effectively take several days off of the whole process. Automation can:

  • Ensure that new employees are easily brought onboard
  • Limit the impact of other employees leaving the company
  • Create an environment where accountability and transparency influences the performance

Artificial Intelligence

AI is still in its infancy as it has the potential to do more than what it can now, and a lot more than what we can even imagine. Despite that, the technology is not entirely new, at least the term itself has been in existence for some time.

However, it was only a promise of things to come. Now many of those things are here, and AI has the ability to:

  • Analyze massive amounts of data
  • Reduce or eliminate errors
  • Make informed predictions that can save millions for the business

All of this is just the tip of the iceberg.

AI can allow businesses to analyze data in a much shorter time frame. For example, the model, we at Consero use, provides for your expenses to be examined and automated in real time, leaving you only with the task to get insights you need from the data we provide for you.

We already mentioned how AI could make informed predictions based on the data it has. AI-based platforms can accurately predict trends that are only on the horizon for now, which in turn can influence how the standards and processes established for the employees. The best part about all of this is that the technology is becoming available to all firms, not only enterprises with massive budgets.

Chatbots

Many people are not aware, but they are already chatting with AI-powered chatbots when they’re communicating with customer service. Not every company is using them of course, but plenty of them are, and people often don’t even notice it.

Chatbots cannot eliminate the need for humans, but they can take over plenty of menial tasks which allows accountants and controllers to use the time they are now able to save on other, more pressing problems they have to deal with.

Ernst & Young, one of the ‘Big Four’ accounting firms, has already built an HR bot of their own. Its name is Goldie, and the company stated that it has already successfully answered almost a million questions coming from their employees.

The bottom line

The integration of AI and automation has the potential to:

  • Improve transparency
  • Reduce stress
  • Limit the damage mistakes tend to make

With all of that in the works, you should make sure to keep a close watch for all the new capabilities the developers will be creating soon. What’s more, you can already clearly see that their efforts have brought about a very positive change.


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