How can businesses use AI to support their finance function?

Artificial intelligence (AI) has become a buzzword in many industries, but is it genuinely benefiting UK businesses? How can it be used to benefit your businesses finance function?

Matthew Melksham, part of our digital specialist team working in business technology and innovation, explores how AI is being used and how you can harness the benefits of AI for your business.

How is AI changing the landscape for UK businesses?

AI is revolutionising the way businesses operate by automating processes, improving customer service, and providing insights through data analysis. Across industries like finance, retail, and manufacturing, AI has enabled companies to increase efficiency, reduce costs, and enhance decision-making. The UK’s financial services industry is reaping the benefits of AI in areas such as fraud detection, customer support, and predictive analytics. Major banks such as HSBC and Barclays leverage AI to identify unusual transaction patterns, preventing fraud in real-time.

How can AI support businesses finance function?

Integrating AI into your finance function is one of the most impactful areas for businesses looking to streamline operations and enhance decision-making. AI can automate repetitive tasks like invoice processing, accounts reconciliation, and expense management, saving both time and resources. Widely used tools such as Xero and QuickBooks are incorporating AI features to automate tasks like expense categorization and payroll, significantly reducing the chance of human error.

How can businesses integrate AI into their finance functions?

To integrate AI into the finance function, businesses should begin by identifying pain points within their current processes. For example:

• Automating data entry and reconciliation: AI can be used to reduce manual intervention, which saves time and minimizes errors.
• Improving cash flow forecasting: AI-driven predictive analytics can help businesses make more informed financial decisions by providing real-time insights based on historical data.
• Risk assessment: AI can assist in identifying financial risks by analysing patterns and trends in large data sets that would be difficult for humans to process manually.

By partnering with AI solution providers or adopting cloud-based AI finance tools, businesses of any size can efficiently manage their financial operations.

What are some of the challenges businesses face when adopting AI?

While AI offers substantial benefits, adoption is not without its challenges. High upfront costs, lack of in-house expertise, and concerns about data privacy are common hurdles for businesses. Additionally, integrating AI into the finance function can be complex, especially for businesses with legacy systems.

There are several ways businesses can overcome these challenges. First, you can start with pilot projects to test AI capabilities before full-scale implementation. Many UK businesses have found success in gradually scaling up their AI integration, focusing first on specific areas like financial reporting and auditing.

You can also work with AI consultants or third-party vendors who specialise in finance tools and ensure your staff are trained to work alongside AI systems.

Are there any government initiatives supporting AI in UK business?

The UK government is actively supporting businesses adopt AI through several initiatives including through the AI Sector Deal, part of the UK Industrial Strategy. Additionally, Innovate UK offers funding for AI-driven projects, helping businesses, especially SMEs, to explore and implement AI technologies that can boost their competitiveness. These initiatives include specific funding for AI-based finance tools, encouraging more companies to explore automation in their financial management systems.

How can your financial advisers support the integration of AI?