How Much Of Finance Will AI Make Redundant?

This article has been written in collaboration with kaunt

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What is possible for Finance to do with AI? Perhaps that is asking the wrong question. Instead, we should think of it as anything is possible and ask how we can make it happen. In the article “Will Finance Become 100% Digitalized” we split Finance into three parts “Finance Operations”, “Analytics & Forecasting”, and “Business Partnering”. The degree of potential automation varied from 25-90% and AI will be a large driver of that. 

It is not envisioned that AI will automate everything as for instance in Finance Operations a control role is still needed within a certain set of rules. In Business Partnering most will still rely on the human interaction to have key discussions on what actions to take and how to make them happen. However, knowing where and what AI will impact is important to know and this is what we will uncover in this article. We will share areas where AI will have an impact and a concrete case from kaunt, a Danish AI-driven bookkeeping service. 

Where can AI make a difference?

In the article “Artificial Intelligence For Finance 101” we broke down what AI is and gave the example of OCR (Optical Character Recognition) as a way AI could be used in Finance. This is just one of many use cases though with others being… 

• Chatbox functionality to look up accounts receivables by connecting the chatbot to all AR-related systems enables it to find all relevant information in a matter of seconds simply by typing the name of a specific customer.
• Automated revenue forecasting by designing several different algorithms that take both internal and external data into account a forecast can be generated in days by a central team instead of weeks by a globally dispersed organization (and even be more accurate).
• Deciding how to deal with a train disruption when there are thousands of possibilities and the decision must be taken in a split second. That is AI-driven business partnering.
• Auditing suspicious invoices for manual approval when you receive invoices from vendors you have not dealt with before and they are routed to manual approval.

These are just a few more examples and remember regardless of the process you are working with you should not ask yourself “if” it could be automated but rather “how” it could be automated. Now let us look at a real case from kaunt of they took over the bookkeeping in Svendborg Municipality in Denmark. 

AI-driven bookkeeping in Svendborg 

In 2018 Svendborg Municipality had been through a tough savings round and was looking for further initiatives to drive efficiencies. However, they had little money to spend and had already used AI-based tools to secure a large VAT refund a few years earlier. How could kauntTM help them gain more savings? 

It turned out that simply by running another VAT analysis through the algorithms additional savings could be gained immediately as Karsten Effe Jespersen recalls it. 

“Despite other experts already have looked at the previous periods kauntTM was able to find additional opportunities through many minor posting errors. This helped us get an additional VAT refund which could further fund the investment in automatic bookkeeping with kaunt” 

Still, it was not full steam ahead from the beginning as Svendborg Municipality only opened one department at a time. Essentially, they were sceptic about an AI product developed by opportunistic engineers meeting the messy reality. However, in April 2020 they went fully live in all departments and have not regretted the decision as Karsten Effe Jespersen rounds off. 

“Our initial caution has proven to be unfounded. With the invoice control mechanisms and robust algorithms underlying kaunt we have gotten a really solid product. It is user-friendly, stable, and now automatically handles a large part of our vendor invoices. Of course, it takes some time for our employees to get used to the new reality. Suddenly they have a lot more time for servicing our citizens and solving more complex problems. Perhaps we should have gone all-in sooner!” 

The two key points, in this case, are 1) the investment was self-funded and 2) it freed up time for employees to spend time on more value-adding work. 

There is no case against AI 

Anything is possible and the benefits are clear. As the case showed your investment will easily be re-paid. The key questions you should answer when it comes to implementing AI-based solutions in your finance function are. 

• Where do I start?
• Who can help me get going?
• What should my team members be doing instead? 

This will help you limit the scope and make it tangible. It will also make it manageable for you as you are not doing it alone. Lastly, it will ease the resistance in the team because they know there is a future after AI. AI will not make Finance redundant. In fact, it will enable Finance to do so much more than we can do today. It will free up our time to help business stakeholders make better decisions. 

There is no cause not to get started with AI. You just need to decide where to start. What is holding you back from experimenting with AI and finding out how it can help your finance function? If you have already started, then tell us about your experiences and what works and what challenges you faced? The time to get started with AI is now so where are you going to start?

Continue reading below for more articles about how digital is impacting Finance.

Will Finance Become 100% Digitalized?

Artificial Intelligence For Finance 101

The Alternative Excel Methods To VLOOKUP

Why The Digital Revolution Hasn’t Caught Onto Finance Yet

Tech vs. People. Where Should Finance Invest?

A Digital Reality Check Of The Finance Function

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Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 8,500 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 47.500+ followers.