Generative AI Moves Finance Teams From Bean Counter to Business Partner

The future of business operations is undoubtedly digital. 

Generative artificial intelligence (AI) tools and automated machine learning (ML) solutions are disrupting the economic landscape and ushering in a new, modern operating environment.

The speed at which this digitization is transforming legacy processes across industries makes it more critical than ever for finance leaders to be more agile and more involved in strategic planning and forecasting.

In the face of contemporary macro headwinds, CFOs are having to cut or manage costs carefully as they return to a focus on fundamental-driven profitability and sustainable balance sheet management. 

A key part of navigating a choppy economy while helping internal leaders chart a data-driven path forward for sustainable growth will be forecasting how much work can be automated across an organization, a task that includes identifying where AI tools and innovations can be effectively leveraged to drive efficiencies. 

As companies grow, back-office functions tend to scale accordingly. Automating them to reduce costs and redundancies can pay dividends as businesses look to optimize cash flow amid ongoing recession fears.

An emergent generation of future-fit AI tools that move beyond siloed automation solutions are ushering in a new era for CFOs, freeing up employees from less rewarding work and augmenting human-level analytical strengths in ways that ladder-up to key business goals.

Read more: Automation Does the Work Accountants No Longer Want To

The Human Element in Decision-Making

“[AI is] changing the way that people look at the operational relationship between systems and people,” James Ritter, CFO at ABBYY, told PYMNTS in a recent conversation. “[Businesses] don’t necessarily need someone to do specific data entry type tasks as much anymore, but you do need individuals that are able to provide additional critical analysis.”

That’s because the human element in decision-making is not going anywhere — in fact, for CFOs, it is only becoming more important as the role evolves from purely accounting and closing the books to increasingly one of a strategic partner taking a holistic view of the business. 

Today’s digital-first CFO stack already allows finance teams to do more with less and frees up their time to focus on business-critical matters by automating formerly laborious and repetitive non-strategic tasks, such as manual data entry and payment issuance, which have long been cost centers for organizations. 

Using legacy methods like spreadsheets, outdated processes, and entrenched workarounds will make it difficult to build and scale in today’s environment, where efficiencies matter and process optimization can further drive competitive differentiation. 

If a business still finds itself running manual accounts payable (AP) and accounts receivable (AR) operations, modern digital solutions provide an opportunity to take a lot of work out of that process and potentially actually drive a much more effective outcome.

Matthew Tillman, CEO at automated accounts payable (AP) solution OpenEnvoy, told PYMNTS that he sees an immediate future in which a lot more CFOs think about “how can we run a department of one?” As businesses can immediately see how few people they might need to run a department.

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CFO Skillset Is Being Transformed

The wheels are already in motion, and Tillman noted that within the generalized finance space, areas like bookkeeping and non-tax audits can “go away today.”

But as the plate of CFO responsibilities continues to evolve in step with digital solutions, finance leaders still provide ongoing value to their organizations that remain beyond the capabilities of any readily available technology. 

CFOs told PYMNTS they looked back on 2022 as “the year of digital transformation,” and while AI tools can leverage the data generated by updated processes, overall strategic pace-setting requires a more nuanced understanding of organizational goals, competitive environment and risk management that algorithms just aren’t ready to handle. There remains a need for experienced finance leaders to keep a steady hand while leaning on AI to surface relevant information and inputs for more human-led critical analysis. 

As departmental teams become less siloed due to the need for data sharing and a holistic, top-down view of business priorities, AI will help build bridges between senior management – but it will not replace the necessity for communication and business planning that CFOs are increasingly finding themselves in the middle of. 

Kevin Held, CFO at Hazeltree, told PYMNTS during a conversation at the start of the year that “finance and accounting teams have become much more of a business partner than just the ‘bean counter’ we were before,” as the role responsibilities of the CFO evolves to include providing greater actionable transparency over cash flow and other strategic needs beyond just cutting costs and approving expenses.

While buzzy tools like ChatGPT offer excitement for consumers, prudent CFOs will likely avoid fully integrating them due to concerns around data-sharing and corporate privacy. 

Rather, enterprise-specific AI tools trained on internal data sets and information will be what finance teams rely on most to inform and optimize process transformations.