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AI in the finance function for businesses

By Lucy Moore
15th Nov 2023

Artificial intelligence (AI) is the ability of a computer to perform tasks that typically require human intelligence, such as learning, reasoning, and problem-solving. AI systems are built to learn from data and improve their performance over time without being explicitly programmed.

AI is a rapidly developing field, and new applications are emerging all the time. As AI systems become more sophisticated and powerful, they are likely to have a major impact on many aspects of our lives.

In basic terms, AI is the ability of computers to think and learn just like humans. AI systems can be trained to perform a wide range of tasks including playing games, diagnosing diseases and self-driving cars. AI is a powerful technology that has the potential to revolutionise many industries and aspects of our lives.

It is swiftly transforming the finance function for businesses of all sizes. It can automate tasks, improve accuracy, and provide insights that can help businesses make better decisions.

Businesses below the audit threshold, may not have the same disposable resources as larger businesses, but they can still benefit from using AI in the finance function. There are a number of affordable AI solutions available, and many of them are designed specifically for small businesses.

Basic versions of these programmes have been on the market for a while, but there is now a broad range of options, and it can be used in many different functions across your entire business, including finance functions. Focusing on your finance function, its uses range from accounts payable and accounts receivable, to reporting and forecasting.

In addition to these specific tasks, AI can also be used to improve the overall efficiency and effectiveness of the finance function. For example, AI can be used to:

  • Identify and reduce fraud
  • Improve risk management
  • Optimize tax planning
  • Make better investment decisions

AI can help businesses to automate tasks, improve accuracy, and gain insights that can help them make better decisions. It’s not necessarily that it will do all the thinking for you, but AI can do the heavy lifting for you. It can look at many data inputs and draw an initial conclusion which you can then work off.

However, AI does need to be used with care and consideration, although there are some downsides, these must be weighed up against the benefits.

AI systems can be vulnerable to hacking and other forms of cybercrime. If hackers are able to gain access to an AI system, they could potentially steal sensitive data, or manipulate the system to commit fraud or cause issues. AI systems are often complex and opaque, which can make it difficult to understand how they make decisions. This can lead to a lack of transparency and accountability in the finance function.

AI systems are trained on data, and if that data is biased, the AI system will also be biased. This could lead to discrimination against certain groups of people, perhaps during credit scoring or loan approvals. This brings us back to the saying ‘rubbish in rubbish out’, meaning that AI can only work on the data it has available and if that data is flawed, so could the result.

If you are a business owner or decision maker, I encourage you to consider how AI can help you to improve your finance function, but to make sure that you consider all aspects. AI is no longer just something for the future or for large businesses, there are a number of affordable AI solutions available, that are designed specifically for small businesses which could help you.