Automation nation is becoming more of a reality with 81% of chief financial officers (CFOs) recognizing the potential of automation to optimize processes and resources and capture data insights across the finance function, according to a new report that surveyed 145 CFOs and other finance leaders across all industries in May 2022.
Further, nearly 60% of CFOs are planning to increase their investments in automation over the next year in light of the tight labor market and rising operational costs, according to StrategicCFO360 and accounting platform provider Vic.ai.
There appears to be a sense of urgency to take action, the report noted. Nearly half (43%) of those polled expect to achieve their goals within the next two years, with an additional 10% reporting that they had already achieved those objectives.
The study also found that a plurality of polled CFOs recognize the value of automating the finance function, with 61% reporting it has significant value.
SEE: Artificial Intelligence Ethics Policy (TechRepublic Premium)
Top objectives of finance automation
Nine CFOs out of 10—and 92% of chief information officers (CIOs)—agreed that their top objective when it comes to automating the finance function is to increase efficiency and productivity. For the CFO, the other top objectives are to generate more actionable insights, reduce errors, improve forecasting/financial predictability (47%), and reduce labor costs (36%).
For the CIO, the priorities are slightly altered: reduce errors, reduce labor costs, generate more actionable insights, and reduce infrastructure costs/maintenance.
“The increased capacity AI brings makes companies more agile than ever before,” the report said. “Imagine a business in an aggressive growth state, where invoices double year over year.
“Traditionally, that company would have to initiate a cumbersome hiring process for new accounts payable clerks, which takes time and is very costly. In contrast, AI solutions can absorb that additional workload—no additional personnel required.”
While increasing efficiency and productivity is by far the leading objective for CFOs to use automation, over half of CFOs are also seeking to generate more insights.
When looking at data collection specifically, a resounding majority of CFOs (81%) said they’re looking to optimize processes and resources with operational processing insights, according to the report.
“Finance leaders are ready to capitalize on the opportunities offered by AI and automation,” said Vic.ai CEO Alexander Hagerup. “Enterprise finance is at an inflection point, driven in part by the maturity and reliability of automation technologies.
“With rising operational costs and specialized talent becoming increasingly difficult to hire, the benefits of automation are clear, and the pressure to adopt intelligent, insightful technology is mounting. Those finance leaders who are now on a path to full automation will be able to soon break away from the pack and position themselves to win.”
What CFOs are automating
A quarter of CFOs report having already fully automated their payroll and invoice management processes, and approximately 45% said it’s underway in both. Other finance functions being automated include purchase order management, expense management, supplier payments, payroll accounts receivable, and data analysis.
The most common challenge faced by CFOs when automating the finance function is integration with their current systems, according to 61% of CFOs.
SEE: 3 things to consider before implementing business process automation (TechRepublic)
What respondents are saying
Enterprise finance is rapidly transforming into a more strategic function as pressure continues to build for CFOs to align and drive financial strategy with business strategy. In addition, the increasingly volatile global economy has accelerated the need for finance to be more agile and proactive in using data to identify the right financial levers to pull at any moment, the report said.
“I do believe that automation is the way to go,” said one survey respondent from the banking industry. “It is the only way that brick-and-mortar financial institutions will be able to compete with the fintechs and other digital forms of banking. We need to utilize AI to the fullest.”
“Our firm is embarking on a digitalization journey, taking advantage of the tools already available internally and exploring new ones in the market,” reported a respondent from the pharmaceutical industry. “Our vision is to become a data-driven, innovative company, always looking forward to integrating business processes to market trends and proactively responding to the customers’ and consumers’ needs.”