21-6-2021 The Future of Accounting: Intelligent Financial Management Applications

The Future of Accounting: Intelligent Financial

Management Applications
BY LAURIE MCCABE | OCTOBER 8, 2020

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The Future of Accounting: Intelligent Financial Management Applications

Most SMB decision-makers understand that technology is increasingly intertwined with business
success: 82% agree that using technology effectively is key sustaining and growing their
businesses. In fact, SMBs that have accelerated technology adoption and investments are 42%
more likely to have increased their revenues since March than SMBs that decelerated tech
investments—and are also 36% more likely to forecast that their revenues will rise over the next
six months than SMBs that have decelerated in this area.

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Among the many technological innovations that promise to help businesses improve
performance, artificial intelligence (AI) and machine learning (ML) are arguably at the top of the
list. These technologies take applications to the next level by making them smart—enabling
them to predict patterns, spot anomalies, make recommendations, and take actions—and learn
and improve how they do these things over time.

AI and ML have already become commonplace in many applications we use every day, for
instance:

Amazon and Netflix use these technologies to surface recommendations to us based on

aggregated customer data.

Google Maps and Waze, use anonymized location data from our smartphones to analyze the
speed of traffic, reduce travel time by suggesting the fastest routes to and from destinations.

Credit card processors use AI and ML to help prevent fraudulent transactions, and minimize
the number of legitimate transactions declined due to being falsely identified as fraudulent.

These technologies are already starting to provide businesses with the ability to more easily
analyze and learn from the vast and ever-increasing amounts of data that we create—but are
still in their infancy. Futurist Kevin Kelly predicts that, will become the new infrastructure
powering a second industrial revolution.

Financial professionals need to understand and guide their companies to take advantage of
these technologies to compete effectively in an increasingly data-driven economy.

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The Impact of AI and ML on Accounting and Finance

Accounting and finance are at the core of every organization, and numbers are at the core of
accounting. Accurate, comprehensive, and timely data provides companies with the insights
required to make decisions that will result in the best outcomes—while even one mistake can
trigger significant problems for a business.

AI and ML can automate and take errors out of manual, repetitive, and time-consuming tasks—
providing accountants with better information and freeing them up focus on more strategic
aspects of the business.

As vendors embed AI and ML into their accounting and financial systems, these technologies
will automate many tasks, such categorizing expenses, flagging policy violations, spotting
trends and anomalies, providing alerts, and making recommendations.

Financials solutions built on multi-tenant, cloud-based platforms, such as Sage Intacct, bring
some inherent advantages to the table when it comes to helping SMBs optimize the value of AI
and ML. The more data that these intelligent systems and algorithms have, the smarter they
get.

Data flows into multi-tenant cloud platforms in real-time, ensuring that the information the
system is working with is up-to-date and trustworthy. Furthermore, financials solutions built on
multi-tenant cloud platforms can draw upon aggregated, anonymized data from thousands of
customers to expand and improve AI and ML capabilities and insights for all customers.

Examples of How AI and ML Improve Financial Management

AI and ML will profoundly change financial management by streamlining routine functions and
putting more analytical power directly into the hands of financial professionals and other
decision makers.

While possible use cases are limited only by our imaginations, many practical examples are
already surfacing, such as:

Accounts payable and receivable: Embedding AI and ML into cloud-based accounting

software can eliminate the grunt work involved with accounts payable and receivable. For
instance, when AI and ML algorithms are integrated into the AP process, the application can
read invoices, extract data, code the invoice to the right general ledger accounts, approve the
process, and make the payment.

Expense management and auditing: Not too long ago, expense tracking and management
was tedious for everyone involved. But with AI and ML, expense management applications
can now read receipts, analyze and categorize expenses, and notify employees or managers

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if an expense doesn’t conform to company policies. In turn, this ensures that the expense
claims submitted to finance are more accurate.

Monthly and quarterly close: Getting the right information as quickly and accurately as
possible helps you make better decisions. Cloud-based financial systems infused with AI and
ML can easily crunch through and analyze larger quantities of internal and external data to
help close the books faster.
Better decision-making every day: The same capabilities that speed up the closing
process also enable real-time reporting and queries. Sage Intacct sees this as eventually
enabling a “continuous close” through its cloud-based financials platform. Data is updated in
real-time, giving decision makers round-the-clock access to trustworthy, current information
and reports. With this information at their fingertips every day, managers can easily track
trends and take actions as needed to improve outcomes—instead of waiting for reports at the
end of the month.
Recommendations: As financial systems get more intelligent, they’ll be able to make action-
based recommendations based on the data. For instance, they’ll be able to do help
businesses predict cash flow over a given time period, and recommend actions to take to
correct potential negative cash flow.

By layering chatbots and natural language processing (NLP) interfaces on top of these
applications, users will also gain a more intuitive, conversational way to query the data in their
systems to get the answers they need.

Perspective

As the Economist put it in 2017, data is the new oil. Those that can use data to create business
value and opportunity have a growing competitive advantage over those that can’t.

This means that it’s not a question of if, but when and how quickly businesses will put
automation, AI and ML to work to eliminate routine accounting work, save money, and improve
their problem-solving and decision-making capabilities. In fact, SMBs overwhelmingly agree that
faster access to better data is critical to helping them to achieve their business goals.

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Although some worry that AI and ML will put accountants out of business, we disagree. Instead,
we see these technologies changing the role of financial professionals. These technologies will
automate tasks, speed calculations and provide easier and faster access to richer information.
But human beings will still need to analyze, interpret, and provide guidance regarding this
information.

Financial professionals that lead the charge and help their businesses take advantage of AI and
ML will be have time to focus on these more strategic aspects of the business and deliver more
value to their organizations.

This is the first post in a two-part blog series sponsored by Sage Intacct that examines the role
of AI and ML in reshaping business processes and decision-making.

©SMB Group

Laurie McCabe
Laurie McCabe brings more than 25 years of experience in the IT industry to her current role as Cofounder &
Partner, SMB Group. Laurie has built widespread recognition for her capabilities and insights in the small and
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medium business (SMB) market in several areas, including cloud computing, mobile solutions, business
solutions, social networking and collaboration, and managed services. Prior to SMB Group, Laurie worked in
analyst roles as a Partner at Hurwitz & Associates; Vice President of SMB Insights & Solutions at AMI-
Partners; and Vice President at Summit Strategies, where her original research of the emerging cloud
computing model earned her broad recognition as a thought leader in this area. Laurie’s nine years at Digital
Equipment Corporation, including her last role as Director of Market and Competitive Intel

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