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5 Generative AI in Finance and Accounting Use Cases 

Author

Monica Neumann

https://www.linkedin.com/in/monica-neumann-pmp/
monica.neumann@auxis.com

PMP | Sr. Manager - Finance Transformation

In brief:

  • CFOs expect Generative AI to have high impact on the finance function.
  • But while interest is high, only 9% of finance organizations have reached “scaling” and “using” phases.
  • Discover 5 practical applications where GenAI has been a game-changer for early F&A adopters and tips for seamless integration.

In finance & accounting (F&A), the integration of Generative AI (GenAI) can be a catalyst for change. More than 60% of organizations anticipate significant impact from the technology across the F&A function in the next two years, according to a 2023 Everest Group report.

But while interest in GenAI is high, Gartner states that only 9% of finance organizations have reached “scaling” and “using” phases, compared to 20% of other administrative support functions like HR and IT. And 61% of finance organizations are not using artificial intelligence at all. 

GenAI offers immense potential to slash a swathe through mundane tasks, leverage data analytics that can handle massive amounts of information, improve risk management, and identify trends humans can miss. But just like any technology, financial industry leaders are struggling to cut through the hype and objectively determine real-world applications, specific benefits, and potential challenges like data security concerns.

Here, we delve into five common use cases where GenAI has proven to be a game-changer for early adopters – and tips for seamless integration into your corporate finance function.

5 ways early adopters are using GenAI in finance and accounting

A 2024 Deloitte study found that Generative AI can optimize work processes and enhance efficiency by 56% (State of Generative AI in the Enterprise Q1 report). The versatility of the technology is evident in the diverse applications of early adopters, transforming traditional workflows for day-to-day processes across the finance sector:

1. Responding to vendor and customer inquiries

Vendor and client inquiries can often be handled more effectively through GenAI. This involves the creation of chatbots capable of drafting quick, helpful responses for vendor and customer inquiries, using vast amounts of data and natural language processing to generate original and innovative outputs.

The AI is trained to provide simple answers while connecting with vendor and customer subledgers in the enterprise resource planning (ERP) system. More complex inquiries are escalated to human experts, ensuring a streamlined and responsive communication process.

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2. Fraud detection in T&E reports

A notable use case involves leveraging GenAI applications to audit Travel and Expense (T&E) reports, detecting potential fraud and inconsistencies that go beyond out-of-policy expenses and can save companies a significant amount of money.

By analyzing data related to average pricing and consumption in restaurants, AI can identify anomalies and discrepancies that may indicate mistakes in reporting expenses into the T&E system. This not only reduces the reliance on manual review processes but also accelerates financial processes by swiftly addressing potential issues.

3. Order-to-Cash automation

Generative AI can play a crucial role in Order-to-Cash (O2C) automation tools – helping to analyze customer data and predict payments, personalize collections strategies, identify credit issues, estimate cash flow, and more.

The result is a significant improvement in cash management for companies, enabling better liquidity and working capital optimization.

4. Partnerships with RPA solutions

Collaborations between GenAI and Robotic Process Automation (RPA) solutions like UiPath showcase the integration of emerging technologies. RPA that is enriched with AI capabilities becomes an even more powerful tool for handling transactional finance & accounting tasks, including accounts payable (AP), accounts receivable (AR), and general accounting.

For example, combining the strengths of RPA and AI can improve accuracy with intelligent data extractions and provides AI-driven actionable insights for strategic decision-making. GenAI can also amplify machine learning models, improving performance by creating new training data, adjusting to new situations, and running tasks faster.

5. Compliance management

Generative AI has proven invaluable in the realm of compliance management. Constant changes in accounting standards such as U.S. GAAP and IFRS rules necessitate a proactive approach.

GenAI can alert users to new regulations, produce summarized tables, and keep accounting practices up to date, ensuring compliance and maximizing risk management.

These everyday use cases exemplify the breadth and depth of Generative AI applications across F&A processes. As organizations increasingly recognize the potential of this technology, its integration is expected to become pivotal for staying competitive and achieving operational excellence in finance organizations.

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6 smart tips for leveraging Generative AI for finance and accounting organizations

In harnessing the potential of GenAI within finance organizations, several strategic recommendations emerge to ensure successful integration:

1. Provide clear and specific instructions

Offering clear and specific instructions when working with GenAI is vital to success. Ambiguities in instructions may lead to unintended or inaccurate outcomes. Ensuring precision in input parameters enhances the AI’s ability to generate relevant and reliable information aligned with organizational goals.

2. Verify source reliability

Validate the reliability of sources used by GenAI models to obtain information. Understanding the credibility of input data contributes to the accuracy and trustworthiness of AI-generated insights. A commitment to using verified and authoritative sources strengthens the reliability of AI outputs.

3. Perform thorough validation and human oversight

Emphasize a rigorous validation process for AI out