Jaime Dreikosen, Chief Accounting Officer at Icertis, discusses the challenges finance and accounting teams face and how AI can shape the future of the function
Britain slipped into a mild recession at the end of last year, and Europe as a whole is experiencing a triple shock on the economy. Despite the harsh macro challenges across the globe, finance leaders are optimistic about their ability to drive profitability and growth, putting digital transformation at the forefront. In fact, three-quarters of executives believe leveraging artificial intelligence (AI) is one of the best tools to remain competitive.
However, significant questions remain about the impact of AI and how decision-makers can integrate it strategically to harness the technology’s full potential. Nearly 50 percent of CFOs say their organization is encouraging the adoption of generative AI in finance despite concerns about workforce enablement, according to Deloitte. These CFOs are looking to workforce productivity, cost savings, and return on investment as the primary key performance indicators to determine whether AI is truly living up to the hype.
The Case for AI in Finance
In recent years, the integration of AI into financial processes, particularly accounting practices, has been on the rise as organizations seek to enhance the efficiency, speed, and accuracy of their financial operations. Within the finance department, AI serves as a powerful tool for automating routine tasks, analysing large volumes of data, and surfacing unique insights to inform better business decisions. This enables finance leaders, including CFOs and their strategic partners – Chief Accounting Officers – to focus on what they do best: strategic thinking and complex problem solving.
Finance teams across companies of all sizes are under mounting pressure to maintain accurate financial data while streamlining workflows. AI’s powerful algorithms are a partner in this endeavour and can analyse massive datasets to detect patterns and anomalies that might go unnoticed by humans, leading to more reliable insights. AI-powered tools also automatically categorise expenses, reconcile accounts, and generate reports, saving time and minimizing the risk of manual error. Additionally, AI’s impact on workflow is transformational, empowering finance teams to evolve from being data processors into trusted advisors who can pinpoint areas for potential savings and uncover hidden revenue streams. In fact, 61 percent of finance professionals believe AI has had a positive impact on the profession and will become more and more prevalent in the workplace.
One example of the transformative application of AI is found in Contract Lifecycle Management (CLM). Finance leaders are turning to AI-powered contract intelligence to create a single source of truth that reflects every business transaction across the enterprise. By centralizing contract data and integrating it with core financial systems, teams gain company-wide visibility into financial obligations, entitlements, and cash flow. Contracts also contain critical language around unpredictable events like supply chain disruptions and price implications from inflation, positioning finance teams and large enterprises alike to strengthen their economic resilience and better prepare for macro challenges by leveraging AI-driven contract management solutions.
AI’s Compliance Challenge
According to Thomson Reuters, 59 percent of finance leaders cite productivity as a top priority, motivating many to look to AI as a game changer for operational improvements. As AI capabilities rapidly evolve, our new reality is that the technology can enable significantly more value beyond optimizing for efficiency. Today’s finance professionals increasingly leverage AI to gain unique insights that support strategic decision-making and ensure compliance with evolving regulations and sustainability reporting across relationships with customers, partners, and suppliers.
Since contracts govern every dollar in and out of the enterprise, poor visibility into contracts also means limited insight into hidden risks. This challenge can be particularly concerning for finance leaders, who require a comprehensive understanding of contractual commitments to uphold regulatory compliance and maintain stakeholder trust both within their organization and throughout its relationship ecosystem.
AI enables finance teams to spend less time combing through hundreds of contracts and creates greater peace of mind. By integrating contract data across the enterprise and applying AI to automate risk analysis, finance stakeholders gain an instant understanding of potential exposure that could consequently affect the company’s bottom line.
For example, a multinational information technology services company sought to streamline its cumbersome contract management process across core functions, including finance. By digitizing commercial agreements that accounted for 82 percent of its revenue and applying AI to derive actionable insights, the company achieved 94 percent compliance across contractual obligations globally.
Conclusion
As EU regulations and the economic climate continues to evolve, enterprises must take necessary steps to operate with agility or risk revenue leakage and significant reputational damage. AI technology is a strategic partner to finance teams in navigating today’s challenges – and the challenges to come. Today, AI streamlines a variety of tasks, from routine activities like payroll processing and auditing to more complex responsibilities like managing regulatory compliance. As AI advances, it will continue to reshape the future of business and ways of working for finance leaders globally.
