The finance department’s new workday, free from time thieves and boring tasks

According to Gartner, automating finance departments is more important than ever, and in many places, invoice validation is one of the worst time thieves. Artificial intelligence is the recommended solution – it can reduce the time it takes to close the books by 30–50 per cent.

In its report, “Top Priorities for Finance Leaders 2022”, Gartner is very clear about what’s at stake leading up to 2023:

Although CFOs have had big ambitions to automate the finance function, progress has so far been slow. As a result, companies that are learning to use artificial intelligence to achieve their business objectives will be able to leave their competitors behind performance-wise, creating a gap that stragglers may never be able to fill.

The rationale is that a fully automated finance function will make way for two key factors, both of which can contribute to this head start: Firstly, it will free up time that the department can spend on tasks that create more value, and secondly, it paves the way for much more efficient processes in the rest of the organisation. Also, such efficiency measures will offer major advantages – hence Gartner’s prediction that stragglers risk falling completely behind the competition.
It may be comforting, then, that Gartner’s report goes on to say that it only takes a minor investment to prioritise a programme to implement AI in the finance function, which will also eliminate the risk of being left behind.

The biggest challenges first

Gartner’s initial observation is also important: In many places, it is not a lack of ambition that has hampered automation. That’s why it’s important to know that not all automation solutions are the same – not even those that use AI and machine learning.

For people who work with modern accounting systems, incoming invoices are hardly worth the paper they’re written on – even when they’re delivered as PDF files. It’s the data in the invoice that matters. Several companies offer to “lift” data from invoices and put it in digital form, but few companies can deliver results that are 100 per cent accurate. If the time spent on punching in information using automation or new solutions is used to validate data instead, you have simply replaced one boring task with another.

The solution lies in the fact that AI loves boring tasks – the more repetitive, the better. Semine has developed machine learning that allows the system to quickly learn to perform those tasks perfectly every time. In addition, the results are subject to an automated validation process that ensures that all relevant data can be automatically sent to the ERP system.

Close the books faster

Such a solution allows the finance department to work in completely different ways: Processes become less people-dependent and eliminate the time it takes from when invoices arrive until they can be sent out for approval, reminder fees can be replaced with cash discounts, and the company gains a better and more up-to-date overview of liquidity and costs, to name but a few.
However, one more element comes into play here: The AI must be able to extract as much information as possible from the invoice. It is not enough to merely extract the final sum, account number and customer identification number (KID). You only see the real benefits when the solution can capture things such as delivery address, project reference, PO number and more. Moreover, the invoice must be split into line items so that it is possible to distinguish between the different categories of purchases, such as cost of goods and services, as well as detail the VAT codes for each individual item.

All these factors can have quite a significant impact. For example, in the aforementioned report, Gartner estimates that finance functions that use (proper) AI in their decision-making can help reduce the time it takes to close the books for the period by 30–50 per cent. In the unlikely event that your finance department has no idea what to do with all that saved time, Gartner has some suggestions:

2022 will be a ‘to be or not to be’ year for CFOs in their quest to grasp the values associated with artificial intelligence, hyperautomation, digital skills, continuous process development and data control.

CFOs who continue to move towards a future with fully automated accounting processes pave the way for enormous value creation in the rest of the organisation in the years ahead.”
In other words, consider the implementation of the latest technology, and the optimisation of resources and processes as a competitive advantage.