Artificial intelligence (AI) is making its presence felt in virtually every industry, and the world of finance is no exception. Spending on financial and sales AI isexpected to double to $110 billion by 2024, meaning you cannot afford to underestimate the impact of AI and how it can help you drive business growth. We know this journey can be daunting, so join us as we explore some of the key ways AI can help you as a finance leader and how you can begin implementing it in your organization.
There are many areas in which AI can help with business finances, including:
Risk assessment refers to understanding where your exposure might be. For example, risk assessment means knowing where you may lose revenue, where gaps in your supply chain might exist, the potential to have serious staffing problems, and specific sectors of your business where you may fail to meet expectations.
Fortunately, adequately configured AI can help with risk assessment and planning. AI will be able to determine where risks to your business might exist and how you can best reduce or combat these potential threats.
As any financial executive or CFO knows, proper revenue planning is vital to ensuring appropriate budgeting and expenditures on critical items, like staff and technology investments. AI can make revenue planning much more accurate. One of the chief jobs of any finance or revenue department is to predict the revenue that the company will be able to generate, as well as develop a series of alternative scenarios that may alter the forecasted revenue.
If properly utilized, AI can assist revenue prediction by:
- Compiling and analyzing various internal factors, including customer growth, trends within an industry, and the staff’s ability to maintain and grow existing accounts or find new ones.
- Engaging in scenario planning may allow an individual to determine what happens if certain financial assumptions are changed.
- Appropriately analyze various external economic factors — like supply chain issues or changes in interest rates — and determine how that will impact your revenue.
- Improved analysis of customer data — including long-term trends, historical needs, and ordering history — to determine where a customer may be interested in ordering more money.
One of the most significant challenges for any organization is collecting the money they invoice. Cash flow problems can create massive strains on various company operations.
AI can assist in Accounts Receivable by analyzing data from inside and outside your organization, then compiling that information to provide recommendations about what tactics and techniques may be most helpful for getting money from particular customers. It may also help you better determine if a customer is likely to pay and if an account may be worth cutting off due to a lack of payment.
This isn’t just some pie-in-the-sky idea, as multiple major banks have launched accounts AI accounts and receivable divisions.
Sales AI is rapidly emerging as an area in which AI develops the technical skills necessary to assist financial leaders in fulfilling their various goals. Consider how the following Sales AI capabilities can help you as a finance leader:
- Improved CRM: If integrated appropriately, Sales AI can help gather better data for your CRM, thus enabling you to develop more accurate sales goals and allow for information that can be tied back to broad-based revenue predictions.
- Client Prospecting: As anyone in finance and sales knows, identifying appropriate prospects is one of the most significant challenges. AI can analyze countless pieces of data and enable you to make more accurate and effective pitches. This information allows your finance team to determine what works, what doesn’t, and what team members are having the creates success.
- Automate Manual Functions: Manual data entry is a common source of mistakes and can distort financial projections. Sales AI can handle manual data entry. This ensures that data and reporting are accurate. It also allows your staff to spend time speaking with clients, not behind a desk.
- Data Tracking: Sales AI can help management and Chief Revenue Officer monitor performance, determine who is performing well, who is failing to meet expectations, and where gaps in your team may exist. It can also provide insight into which products or services are selling best and which you may need to cull from your list.
- Identification of Whitespace: A large part of any CFO or CRO’s job is determining where opportunities exist to increase revenue. Sales AI can help to identify this Whitespace. Whitespace is the gap between what you offer and what you sell to your clients. AI may be able to analyze a client’s business model and determine what products you have that you can potentially sell to your client.
The job of a Chief Revenue Officer or finance department should be to analyze data and assist other members of a business in making appropriate revenue predictions and enhancing revenue, not entering data that could be done by a computer. This is where AI shines: It can automatically enter data into spreadsheets, then place that data into usable reports. This can save an FP&A time and money by removing the pressure to spend hours entering data. This allows a CFO, CRO or finance team to increase their efficiency whilst also eliminating the possibility of human error, thus improving accuracy.
Every company fears bad debt, the kind that comes with selling goods or services to customers, only to have them not pay. The challenge, then, is to eliminate riskier customers and ensure you appropriately protect yourself and reduce your risk. AI can analyze a series of factors to ensure you better spot debt risks which can lead to you taking appropriate precautions or potentially stopping sales to a customer.
Virtually every CFO or CRO has the same goal: Find the highest price they can reasonably expect a customer to purchase a good or service at. Predictive pricing is a function of AI that can help you find that point. It can also help you identify variables — such as location, marketing campaigns, or even the weather — that can alter the price that a customer is willing to accept.
Now that you know how AI can help your revenue or finance office, you have a very important item to address: What do you need in software? What should you look for that can solve these challenges?
When installing AI for revenue predictions or a CFO office, you need to make sure that the program can grow and shrink to fit your needs. This means you must have a program that can add functions, users, and adapt to changing financial pressures. A program that is locked into specific modes will ultimately not be helpful.
AI is only valid if the people operating it fully understand its functions. Does the AI you are investigating have automated training, live training, or at least live support? How quickly can you get answers to common questions that you may have?
Sometimes, you can wait a day or a week before getting reports. Other times, you need live, real-time information. Does your AI give you real-time information? If not, how frequently is that information updated?
If you want to get the best out of AI, then Next Quarter is the perfect solution for you. We have the tools, experience, expertise, and connections to ensure your organization benefits from the technology. This includes real-time revenue forecasting.
Next Quarter can help you discover patterns across a wide range of sales scenarios, and our tools, such as guided selling and sales forecasting, allow your team to streamline and automate myriad tasks. Contact us today to schedule a demo and learn more about how Next Quarter can help your business grow and thrive.