Why the accounting or finance department is ripe for disruption

Visit original Austin Business Journal article here

Bringing artificial intelligence and other software into a company’s finance function can have big benefits — improving transparency and the speed of information flow, for instance — and helping CFOs shift their focus from putting out tactical fires to strategic initiatives.

“Seventy percent of your time can be freed up to focus on strategic initiatives,” says Scott Tynes, CEO of Consero, an Austin-based provider of finance as a service, an outsourced finance solution for growing companies. His company, as part of its overall technology-enabled solution, has developed SIMPL, a cloud software platform for finance, along with Simon, voice-activated AI technology that functions as a SIRI or Alexa for the accounting/finance department.

But software alone won’t bring a business the benefits of artificial intelligence. “This happens a lot of times even outside AI technology, quite frankly,” Tynes says. “A lot of times people think, ‘Well, our finance function is a disaster. We just need to move to this new general ledger and that’s going to fix everything.’ Ninety percent of the time the problem isn’t the general ledger. It’s the process that’s leading into the general ledger. If you don’t fix the process, just throwing technology on top of it isn’t going to fix the problem.”

A business needs the right kind of software and processes in place to maximize AI effectiveness and build a strong finance function for the business. “For AI-type functionality to work, the data and the way that the data is stored has to be in a very consistent fashion,” Tynes says. If the software is from multiple vendors that use different processes to arrive at conclusions, that will only confuse whatever AI is put in place.

“The AI doesn’t know how to get an answer as well as when you have a consistently-defined technology stack. It’s much easier to put AI on top of well-defined technology,” Tynes says.

The solution

Business leaders already have access to powerful consumer artificial intelligence tools on their smartphones. And they will want it for their business and finance functions.  “To get this type of functionality, the foundation of it is having a ton of volume and centralizing that volume into one place so that you can standardize how it’s done,” Tynes says. “We kind of view it as you’ve got to centralize it, then you can standardize it. Then you can automate it.”

That’s tough to do in-house at a small or medium-sized company. Research and development to create an effective AI is a multi-million-dollar proposition, and small and mid-sized companies cannot always justify those large expenditures. That’s why Tynes thinks technology will drive small and mid-sized companies to outsource accounting and finance functions.

“Think about a small company with a four-person finance and accounting team. They’re not going to go build the smartphone and the Siri that sits on top of the smartphone. There’s just no way they’re going to go build that,” he says. “It’s way too expensive and doesn’t make sense for a four-person finance and accounting function to go build that. The way they can access that is to go to an outsource provider that, because they serve hundreds of companies, it does make sense for them to build that functionality.”

That’s true even at larger companies below $1 billion in revenue, he adds. “These technology tools take millions of dollars of R&D efforts and nobody’s going to direct millions of dollars of R&D efforts to a $200 million business’ finance and accounting function,” he says.

What to look for in an outsource provider

Tynes says there are a few questions executives should ask when looking for a provider of outsourced finance solutions, including:

  • How is success measured? For instance, is there a threshold acceptable error rate per a certain number of transactions?
  • What tools will executives have to access and understand success?
  • What kind of technology workflow tools, such as task management systems, is the provider using to handle the work?
  • What are the turnaround times for work and information requests?

“All those kinds of questions will help you as a buyer get underneath the question: ‘Am I really buying a technology-enabled service here, or am I just buying a bunch of people who say they’re going to manage this finance function for me?’ What you really want to make sure you’re buying is a technology-enabled service that’s using workflow tools, automation tools, to really up the quality of the finance function that you’re getting,” he says.

Learn more about Consero’s finance as service offerings, including requesting a demo.

Consero provides solutions for high-growth, mid-market companies with a superior alternative to building and maintaining an in-house finance function. It also offers solutions in strategy and funding services, operational financial services, financial controller services, bookkeeping and administration services and a cloud software platform.
Kent Bernhard is a freelance writer for The Business Journals.