January 13, 2025

The Future of Finance is AI: How to Leverage it Today

Discover how AI is revolutionizing corporate finance. AI is already transforming finance operations and driving results for modern corporate finance teams.

The Future of Finance is AI: How to Leverage it Today

2024 was the year of AI – everyone from presidential candidates to incoming freshmen has been using AI to make their lives better.

Matt O’Brien and Sarah Parvini recently published an article in the Associated Press called “In 2024, artificial intelligence was all about putting AI tools to work.” However, that has not broadly been the case for finance teams. Within most finance departments AI remains a strategic priority but has not yet been put to work within their organizations.

The Potential of AI in Finance

What's clear to CFOs is that AI isn't just another trend – it's poised to fundamentally transform how work gets done. Over and over finance leaders have seen the impact that AI has had on day-to-day workflows by taking on the most repetitive and mundane tasks and streamlining those to seconds. Marketing teams are getting more creative with copywriting & design, support tickets are being answered in seconds, and engineering teams are writing 2x the amount of code.

Beyond helping finance teams with their manual work (which as we know is 90% of where analysts are spending time), AI has also started to enable finance teams to drive strategic business decisions by surfacing new insights & data. And for the early adopter finance teams – the impact teams are seeing with AI has allowed them to scale faster than ever before with a better-prepared mind & understanding of their business.

Key Areas Where AI is Already Making an Impact

1. The Close Process: Closing the Books Faster Than Ever

Traditionally, closing the books is a time-consuming, manual process, often involving countless hours of reconciliation, data entry, and review. Studies show that the average time to close the books can range from several days to several weeks. A study by CFO.com found that for most companies, it takes an average of six and a half business days to close out their books. And for some, it can stretch to two weeks or more, especially at year-end or quarter-end. This extended timeline ties up valuable resources, delays crucial financial reporting, and postpones timely decision-making.

AI is already automating key aspects of the close process across:

• Automate Reconciliation: AI can match transactions across different systems of records, identifying discrepancies and automatically reconciling accounts, significantly reducing manual effort.
• Identify and Correct Errors: AI can analyze vast datasets to identify duplicate or incomplete transactions, flagging them for review and correction. This minimizes errors and improves the accuracy of financial records.
• Improve Categorization: AI can analyze transaction data and automatically categorize them according to established accounting principles, ensuring consistency and accuracy.
• Flag Incorrect Categorizations: AI can identify transactions that have been incorrectly categorized by analyzing patterns and comparisons with similar transactions.

By automating these tasks, AI can significantly accelerate the close process. This not only reduces the burden on finance teams facing staffing challenges but also allows for faster access to critical financial information. Today AI can analyze vast datasets to identify discrepancies that humans might miss, leading to more accurate and timely financial statements. This enables businesses to make more informed decisions based on up-to-date financial data.

2. Financial Reporting: From Days to Minutes

Creating financial reports is one of the least favorite tasks that corporate finance teams have to perform. It involves manually collecting data from various sources, consolidating it into spreadsheets, and then formatting it into presentable reports. This process can take days or even weeks, depending on the complexity and frequency of the reports. A study by CFO.com found that over than 50% of finance teams spend more than a week each month just preparing management reports. Add to that the fact that according to IDC, only 18% of time allocated to reporting is focused on analyzing the data and the impact AI can have on reporting workflows is significant. Current reporting processes divert valuable resources away from more strategic activities and decision-making.

AI is transforming financial reporting by automating many of these manual tasks. AI-powered reporting enables teams to create comprehensive monthly reports in a fraction of the time. Instead of days and weeks, finance teams can share Flux Analyses, Budget Variance reports (BvA), and Department-specific reports within minutes of closing the books. Reports can be created with –

AI is already automating core reporting workflows:

• Real-time Data: AI can integrate with company data sources and provide a unified view of financial information. This eliminates the need for manual data collection and consolidation and reduces the potential for errors.
• Beautiful Data Presentation: AI can create visually appealing reports with interactive dashboards and deeper analyses, uncovering trends and insights that might be missed with traditional methods. Formatting is consistent across reports and changes can be made in a fraction of a second while keeping formatting consistent.
• Automated Commentary Generation: AI goes beyond simply presenting data; it can also generate commentary that explains the key trends, insights, and drivers behind the numbers. This contextualizes the data and makes it more easily understandable for a wider audience, including non-financial stakeholders.

The advances in LLMs are allowing teams to automate the manual aspects of creating reports as well as deliver a new level of depth into reporting packages. By automating the most time-consuming aspects of the process, AI frees up teams to focus on higher-value tasks, such as interpreting insights and making informed decisions. This allows for a more efficient and faster report cycle with impact that can be measured immediately.

3. Financial Forecasting: Predicting the Future with Data

Financial forecasting is a cornerstone of effective business planning. Accurate forecasts enable organizations to make informed decisions about resource allocation, investments, and strategic direction. The status quo today is either relying on spreadsheets and manual analysis or software to assist in forecasting & model management – both have limitations as to the accuracy of the forecasts. Studies have shown that traditional forecasting methods can be significantly off the mark, according to Bloomberg, around seventy percent of public companies miss earnings forecasts. Gong also reported that more than 80 percent of companies have missed revenue forecasts over the last two years. This level of inaccuracy can lead to misallocation of resources, missed opportunities, and even financial losses.

AI is transforming financial forecasting by leveraging advanced analytics and machine learning techniques. AI enhances financial forecasting in several ways:

• Analyzing Historical Data: AI algorithms can analyze vast amounts of historical data, including financial statements, market trends, and economic indicators, to identify patterns and relationships that may not be readily apparent to human analysts.
• Identifying Hidden Trends: By analyzing complex datasets, AI can uncover hidden trends and correlations that can significantly impact future performance. This allows for more nuanced and accurate predictions.
• Simulating Economic Scenarios: AI models can simulate various economic scenarios, such as changes in interest rates, inflation, or market demand, providing deeper insights into potential outcomes and enabling businesses to prepare for different possibilities.
• Improving Accuracy: By incorporating more data and using sophisticated algorithms, AI can significantly improve the accuracy of financial forecasts compared to traditional methods.

AI allows finance teams to make more accurate predictions, helping the business plan more effectively and generate better results. AI models can simulate various scenarios and provide deeper insights into potential outcomes. By improving forecast accuracy, AI empowers businesses to make better-informed strategic decisions, optimize resource allocation, and mitigate potential risks.

4. Compliance and Policy Management with AI: Streamlining Processes

The complexities of regulatory compliance, including preparing and filing income tax returns and various disclosures, combined with the creation and maintenance of internal policies, place a significant burden on finance and accounting teams. This burden is further amplified by the ongoing talent shortage in the accounting profession. According to a 2024 survey by Robert Half, a staggering 86% of senior managers in finance and accounting report difficulty finding skilled professionals. This challenge is compounded by a declining pipeline of new talent. A recent Wall Street Journal article highlighted an 18% decrease in accounting majors from 2016 to 2022, further exacerbating the scarcity of qualified accountants. This combination of high demand and limited supply puts immense pressure on existing teams, increasing the risk of burnout and errors in critical compliance processes.

AI offers a powerful solution to streamline these essential functions:

• Automate Data Extraction and Form Filling: AI can extract relevant data from various sources and automatically populate tax forms (Form 1120 and Form 1099) and disclosure documents, saving significant time and reducing manual errors.
• Ensure Regulatory Updates: AI systems can be programmed to stay up-to-date with the latest tax laws and regulatory changes, ensuring compliance and minimizing the risk of penalties.
• Automate Policy Creation: AI can analyze existing best practices, industry standards, and relevant regulations to generate initial drafts of internal policies (ex: expense management or travel policies), ensuring consistency and compliance.
• Streamline Policy Maintenance: AI can track changes in regulations and suggest updates to existing policies, simplifying the maintenance process and ensuring that policies remain current.

By automating these processes, AI not only saves valuable time in drafting policies but also reduces the risk of errors and ensures compliance with ever-changing regulations. This allows finance and accounting teams to focus on more strategic initiatives, rather than being bogged down by manual compliance tasks.

Benefits of AI in Corporate Finance Teams

Fewer Mistakes

By automating manual data entry, calculations, and reconciliation processes, AI significantly reduces the risk of human error, leading to more accurate financial records and reporting. This enhanced accuracy minimizes costly corrections and strengthens trust in financial data.

Better Decisions

AI provides data-driven insights by analyzing vast datasets and identifying complex patterns, empowering finance teams to make more informed and strategic decisions. These insights can reveal hidden trends, predict future performance, and optimize resource allocation.

Increased Productivity

Automating time-consuming tasks like report generation, reconciliation, and compliance checks frees up finance professionals to focus on higher-value activities, such as strategic planning, analysis, and business development. This boosts overall team productivity and allows for more efficient use of resources.

New Insights

AI's advanced analytics capabilities can uncover hidden patterns and correlations within financial data that might be missed by traditional methods. These new insights can reveal opportunities for cost savings, revenue growth, and improved risk management.

About Concourse

Concourse is building AI agents for corporate finance teams. Concourse works alongside finance teams to assist in day-to-day operations by taking on the most manual and time-consuming work.

Concourse’s AI analyst is tailor-built for finance teams with full connectivity to a company’s existing financial systems. It enables team members to more effectively retrieve and analyze data via natural language to 10x daily productivity.

Concourse’s industry-leading reporting capabilities allow finance teams to create detailed & commentary-rich monthly reports in minutes and eliminate hours to days of manual work.

If you’re excited about leveraging AI for your finance team please join our waitlist or email us at hello@concourse.co for early access.